The flywheel serves as a balance for the engine, as well as a gear for the starter motor's gear to connect to. It is usually connected to the side of the engine which is connected to the transmission, the opposite side that the serpentine belt is on. It is ideal for the starter connection due to the mechanical advantage it allows, with the small starter gear turning the large flywheel gear.
The ring gear is often pressed on or welded on. It is what the starter's bendix gear engages in order to turn the engine in an attempt to start it.
A high-performance flywheel is designed to be as light as possible, which reduces the amount of energy required to change its speed, which then allows the engine to change RPM quickly. This is desired in racing vehicles because it allows for quicker gear shifts, and it slightly shortens the time to get to the peak RPM in first gear.
On some high-tech racing vehicles such as F1 and Le Mans, a Kinetic Energy Recovery System (known as KERS) uses a flywheel to store energy normally lost while braking, and release it to provide a speed boost to the vehicle when the time is right. However, the KERS flywheel is designed completely differently than that found on a standard vehicle, since traditional flywheels have no way of storing and dispersing kinetic energy on demand.