What is sharpening in cameras?

The page for it in Nikon D90 owner's manual seems vague. It has settings of 0-9. IF it were to make every photo extremely sharp, why doesn't Nikon just default to 9?

Added (1). On camera you go from Menu, Vivid, Sharpening.

This is my understanding of the process (although I could be wrong):

Sharpening is above and beyond the scope of the optics, i.e. It isn't "real" or "natural", but achieved via mathematics and computer (and yes, those cameras do contain small "computers").

That process, however, isn't flawless. So whilst at times it DOES improve the image, other times it makes certain areas worse. So really, it is up to personal preference - YOU need to decide which positive effect you prefer, and which negative effect bothers you more.

I'd try it out in a very controlled setup first, just to see how much difference it really makes. However, the effect WILL vary from photo to photo (e.g. In the dark vs bright areas, halos around edges, etc).