A sump is a water tight vessel (small tank, Rubbermaid container, etc.) placed under the main tank. A pump in the sump pumps water up to the main tank where, as the water level rises, water overflows into a plumbing system and drains back down to the sump.
It's not entirely unlike your Fluval canister, except that the water is not 'pulled' up and out of the main tank. It's basically a constant loop of water being pumped up to the tank and draining down to the sump below.
The biggest advantage of a sump is that it increases the overall water volume in the system. It is a good place to hide equipment like heaters, protein skimmers, etc. It's also a good place to add/remove water during water changes, take water samples for testing, and dosing supplements.
Most people use glass or acrylic fish tanks for sumps - some use plastic Rubbermaid style containers and some have very elaborate acrylic sumps purpose-built.
Do you need one? No. Would I recommend one? Yes.
