I think people tip for service jobs in which service is a big part of the experience. For example a waiter/waitress for you and 11 friends is someone who can have a big impact on your mood. This is unlike say, a packaged good (for example, an xbox), where the good itself is all that matters. Waitress + Food = Experience, but xbox + nothing else (only other games) = experience. So you pay for the physical good itself.
However this raises the question of car dealers. Your salesperson has a huge impact on your experience. however, you don't (usually) tip them because they make a commission instead for their "service."
In essence I believe people tip for jobs where service/performance is a major part of the deal. Sometimes you tip a freelancer/shop owner as well, and i believe the idea that not tipping the salon owner (haircuts) is erroneous, unless he or she turns it down. The idea is that people in these industries are given less by the employer, because they do work that depends very much on skill (which fluctuates, such a hair-cutter who is unskilled in cutting for, say, spiky hair.) If the establishment just paid these service workers a flat rate, then it might be too much (in which you'd have to pay more, even if you hated the service) or too little (which would just lead to more tipping.)
Tipping in other words is your rating system. You give the reward on terms of how good the service was, and how much the skill is worth, along with what the person can reasonably expect. So pizza delivery might get $2-3, while upscale dining may get a percent instead, depending on how difficult it is to do (how many dishes, how nice, etc.) But not for things that aren't the waiter's fault (bad food, which she should take back if asked, or crying baby a few tables away, unless you asked to be reaseated.)
