If you've ever dropped a stone into a pond, you've seen what causes toilet splashback. When a solid (or in this case, semi-solid) object plunges into a body of water, it creates a depression similar to an impact crater. Of course, being a fluid, this depression cannot last for long and the water rushes back to fill the void. Since the depression is pretty circular (assuming a straight drop), all the sides meet in the center with some momentum. This force has to go somewhere, and since it's coming from all sides, including down, the only direction left is up.
Splash. Now your bottom is wet. Gross. Cold. Uncomfortable. Unsanitary.
Urine is pretty sterile, but fecal matter contains fecal coliform bacteria such as E. Coli, and now so does the toilet water. Bacteria won't wipe away with toilet paper, it'll be there at least until your next shower. Meanwhile it's breeding and growing in the dark, moist confines of your underpants and seeking any break or sore in your protective layer of skin to cause an infection. It's almost enough to make you hypochondriac.
So it's rather important to try and prevent toilet splashback. There are a few methods of varying effectiveness, most of them duplicates of the well-known bit of urban lore, "How to take a quiet dump."
By far the most effective method, however, is something I read in the Savage Love advice column. By placing a few sheets of toilet paper in the bowl (flat, not crumpled), you can dampen out the ripples in the water that cause splashback, keeping your backside clean and dry. I've found it to be excellent advice and recommend it to all.
karma debt says this technique also helped her out with a leaky window during a storm. When the bowl she was using to catch the drips got too full, the drops of rainwater splashed outside of the bowl. Floating a paper towel on the surface of the water solved that problem!