What is the Function of NATO?

It's not a rhetorical question. I really can't see what the NATO alliance is supposed to accomplish at this point. It is the paradigmatic Cold War institution, the centerpiece of a system of alliances (remember SEATO and ANZA?) meant to guard against Soviet expansion. Today it still can be aimed at no one but the Russians, a fact that quite reasonably vexes them no end, especially now that NATO expansion has moved beyond the Central European states and into traditional Slavic spheres in Ukraine and the Balkans (President Bush yesterday supported Ukraine for membership, a proposal likely to be voted down by the Europeans). Moreover, NATO is an institution bound up with Cold War nuclear strategy (as in Mutual Assured Destruction): under the nuclear standoff over divided Europe between the USA and the USSR, NATO (and the Warsaw Pact) insured that neither side would start anything along the peripheries, at the risk of escalation. Today, such an alliance with dozens of states only insures that should conventional troubles flare up (as inevitably they will), everyone gets drawn in. Limiting diplomatic flexibility in this way serves no current purpose (and look into the origins of World War I). Meanwhile, it is a constant refrain from the Americans (myself included) that the Europeans need to become the guarantors of their own security, while the Europeans lead the global chorus demanding that the US stand down from its role as global gendarme. The whole point of European Union is to provide an alternative to American hegemony, and this must be true both economically and in terms of security. So I ask again, what is the function of NATO? And why on Earth would the go-it-aloners Bush and Cheney be so adamant about its expansion, while they otherwise insist that the US will never be tied by international organization or opinion?