No it is not. If plug and play is not enabled and running, the messenger service may not function completely correctly. There are no services which are dependent upon messenger though, only services which messenger is dependent upon.
Messenger is used for communication between workstations... If I had your IP, and you had messenger enabled and running, I could send you a netsend message from the command prompt.
The messanger service was intended for use by network administrators. The Admin could do a netsend command (or whatever) to quickly pass info to the entire network. Unfortunately, SPAMers quickly found this feature and exploited it. With service pack 2 comming out for XP, messager will be turned 'off' by default. Turning this service off will not affect your machine at all.
Please note, this is not the same thing as MSN messanger.