Its primary purpose is to act as a 'writing machine', a machine which produces both literature and music, its primary target audience being the Proletariat.
The purpose of the versificator is to provide a means of producing 'creative' output without having any of the party members having to actually engage in a creative thought. The versificator is capable of producing newspapers, containing content similar to that found in modern day tabloid, featuring stories concerning sports, crime and astrology.The machine is also capable of producing films, low quality paperback novels, and music, of a sort.
Orwell clearly meant the versificator as a commentary on the quality of low culture and its ultimate effect. The metaphor of the factory or the production line commonly appears in discussions of mass-distributed culture.
Similar machines appear in the "Down There", a bleak dystopian short story by Damon Knight and in The Silver Eggheads by Fritz Leiber. The latter novel describes a future in which machines generate "wordwooze" in order to amuse the populace.