This answer is obsolete for modern Ubuntu releases

Without the extra package, most hardware won't work!

It contains extra drivers left out of the base kernel package; install it only if you need these drivers

Sometimes, a specific variant of the linux-image is slimmed down by removing the less common kernel modules (drivers). In this case, the linux-image-extra package simply contains all of the "extra" kernel modules which were left out.

• Officially, this only happens for the -virtual image; the most common hypervisors (Virtualbox, VMWare, Xen, KVM) emulate a well-defined and restricted set of hardware, so removing unnecessary drivers which increase the size of the kernel/initrd is a good idea. You can always get them back by installing the extras package.

  
  



• The kernel team also appears to have adopted this method for some of the mainline-PPA -generic kernels; the reasoning and solution remain the same -- if it looks like the base kernel image is missing a module you need, install extras.

  
  



• As far as I know, the above approach has not been taken for the Quantal kernels -- only -virtual is affected as usual.