Butter, like any fat, acts as a tenderizer in baked goods. It forms a coat around flour proteins, preventing them from linking up with each other to form elastic, rubbery sheets of gluten that would make a cake tough and chewy. Fats that are liquid at room temperature, like oils, do this better than fats that are solid, which is why cakes make with oil are so tender and moist. On the other hand, solid fats are able to trap thousands of tiny air bubbles when they are creamed, which later expand in the heat of the oven and thus produce a light, airy texture; oil cakes tend to be denser, and at their worst can be gluey.
Serious bakers prefer butter to any kind of vegetable-based shortening because of its superior flavor, aroma and the melting texture it gives to a cake. Three kinds of butter are most commonly available in supermarkets : salted, slightly salted and unsalted. These are usually  roughly 80% fat and 15% water, the rest being milk proteins. Cheaper butters tend to contain more water and thus are soften than higher-grade butters. Unsalted butters tend to contain more water and thus are soften than higher-grade butters. Unsalted butter has a sweeter, more delicate dairy aroma and flavor than salted butter, and that from the Normandy region of France is held to be the king of butters, for its flowery aroma and rich taste. Butters with a higher fat content are available to the catering trade and, in some countries, are sold in supermarkets. (One example is Plugra, a French butter available in Europe and the US .)
Butter should be stored in the fridge, wrapped airtight as it quickly absorbs the odours of neighboring items. It can be frozen successfully for a few months; just remember to let it defrost slowly in the fridge.
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