I always thought it was just another piece of moulding. In my house it is only found in the bedrooms, is this the case in your house as well?
http://www.govart.com/images/hwr_railmldg2LG.jpg
http://charlesrupert.com/hardware/picturehooks.html

These rails were used to protect the lath and plaster work of the walls. Nail holes could often leave rather large holes and sometime whould not support the weight of the larger paintings or pictures.

Modern version of the same idea has caught on in some homes.

Fred