Honeypots have two main purposes: diverting hackers and collecting data.
Production honeypots are used as a security measure by corporations. They are meant to fool hackers into thinking they've infiltrated the company's production systems when they are only interacting with a decoy. The company can enact security measures on the production system during an attack, in case the hacker realizes he's been duped. These low-interaction honeypots do not collect a lot of data and only emulate services frequently requested by hackers.
Research honeypots are used by universities, governments and the military to reveal the motives and tactics of the hackers. As such, they collect as much information as possible and emulate entire computers. In contrast to production honeypots, these high-interaction honeypots are difficult to maintain and set up.