Having a hot pan is vital to cooking your food properly. In addition to creating a beautiful sear on your ingredients, having a properly heated pan will also reduce the amount of oil absorbed.
If you added a French fry in cold oil, it would absorb the oil, but if you put it in hot oil, it would crisp the outside without turning it greasy. Besides not having your food become an oil-filled mess, having a hot pan allows your food to create a crust on the outside, which lets it easily release from the pan while adding a whole new realm of flavour.
You always want your pan to be hot before you put anything in it, and the easiest way to tell is by looking at the oil. If your pan is too cold, your oil will look thick, like it did coming out of the bottle. If your pan is just right, the oil will "shimmer" when you swirl the pan; it will look as though it has dimples. You will know you have passed the sweet spot if your oil starts to smoke, at which point you need to take it off of the heat immediately.