What is the purpose of the valley baffle pan on an FE?

 

As is the case with most, it keeps hot oil off the bottom of the intake, and helps control oil in that area to ward off leaks.

ON EDIT: See post 4, I forgot about the exhaust crossover, which is the real reason it's there.

 

Thank you sir.

 

On a stock intake, there's an exhaust crossover that routes exhaust gasses underneath the carb to help a cold engine run smooth until it's warm. The flow is controlled by the heat riser on the driver's side exhaust manifold.
This makes the bottom of the intake very hot, hot enough to "cook" any oil that hits it and turn it into a abrasive carbon residue. The valley pan is there to help deflect oil away from the bottom of the intake.
On other Ford engines this baffle is riveted to the bottom of the intake and isn't a separate part.
If you're running an aftermarket intake without the passage or you're running headers then the baffle really isn't necessary unless you just want to keep the hot oil off the bottom of the intake.