This pays for the customer service and mailings they send you as well. The 12b-1 distribution fee should be avoided at all costs. This is the fee they charge you to advertise and market the fund. I don't think anyone really cares to see advertisements for a product that they've already bought so you should avoid buying funds that charge you a 12b-1 fee. There is some statistical mumbo jumbo to take all of these fees and determine the expense ratio - I don't know what it is, but you should expect an average of 1.5 for a managed fund and an average of 0.25 for index funds.
Loads are more wonderful fees that are meant to pay for the brokers services.
A broker is a middleman that can sell you a mutual fund or share of stock. There are three different kinds of loads. The front-end load is a fee that the broker pays himself for telling you which fund to buy. They typically charge 5 to 8 percent of your investment and take it as soon as you decide to make an investment, thus the name, front-end. The deferred load is even worse.