The `ROW_NUMBER()` function is a window function that assigns a unique sequential integer to each row within a partition of a result set. It's crucial for tasks like generating unique identifiers for rows, creating rankings, and implementing pagination. Unlike other ranking functions like `RANK()` or `DENSE_RANK()`, `ROW_NUMBER()` always assigns a unique number, even if multiple rows have the same value in the ordering column. This makes it ideal for scenarios where you need a precise, sequential ordering. For example, if you want to assign unique IDs to customers based on their registration date, `ROW_NUMBER()` is a perfect choice. It's also essential for tasks like creating a numbered list of products based on their price or generating a unique ID for each row in a large dataset. Understanding `ROW_NUMBER()` is fundamental for efficient data manipulation and analysis in SQL.