Mike
It is a resonator/silencer. Some say it also regulates the way the air flows into the throttle body. Here is a full thread on it and what it does, and several ways on how it can be removed safely.
http://www.sr20deforum.com/NonCGI/Fo...ML/002115.html
NOTE: If you remove it, you must plug it with something. If not, your engine will run like shit or not even run. Most say Gatorade caps work well to cap it off, but I would suggest you use a PVC pipe end cap that slides into the hole on the rubber intake hose like I did and a few others have done. There is an outer lip on the PVC cap so it will not get sucked into the throttle body. It's about $2 at you local hardware store.