Incorporating protects your officers , if you plan on getting incorporating and obtaining your 501 status please incorporate first as it will save you money and alot of headache!
It's not required. But the biggest reason it is usually encouraged is because of liability--as a corporate entity, the individuals (officers or members) generally can't be held personally liable for something. I know there's been a big discussion about this on the boards before; you might want to try using the search feature and reading back a ways. In most states, it's really not that difficult a process. I know there's also a really good writeup in the PTO Today Plus materials, if you have joined that (which I would do if I were you).
This also is not an issue exclusive to PTOs. Last year, all the local units of our state PTA were encouraged to incorporate.
