A pizza peel is a flat tool used to slide pizzas in and out of the oven. Most peels are made out of wood, but you can buy metal peels as well.
The main purpose of the peel is to help transfer a pie in and out of the oven without ruining the shape. The handle on the peel allows you to get the pizza further back in the oven, and also removing it, without burning your hands.
Just like with a pizza stone, it's smart to sprinkle a little cornmeal on the surface so your pie slides on and off without too much trouble.
I personally don't have a peel (my oven isn't all that big), but I can certainly see why you would need one with a wood burning pizza oven. Even with a small oven, it's a great way to transfer the pizza without deforming its shape.
Check out the different types of peels below available from Amazon.com.