Mostly an organisation item. Basically, you can place items you find and pick-up into the Bottomless Box at a Bonfire. This allows you to keep your inventory clear of stuff you may not want to get rid of.

Sold by two Merchants for 1,000 Souls. The first is the Undead Male Merchant in Undead Burg. The second is Domhnall of Zena who can be located in Depths and later at Firelink Shrine.