It seems to be one of the most important and most abused safe driving techniques. During drivers training I was taught to leave a MINIMUM of 2 seconds following distance between your front bumper and the rear bumper or the driver in front of you; this is in perfect conditions. As speed increases or conditions worsen, the distance needs to be dramatically increased.
When stopped, I have been told to leave enough distance that you can see where the rear tires of the car in front of you touch the road and enough distance to be able to drive around the vehicle in front of you without needing to go into reverse. This gives you room to get out of an ugly situation if need-be.
There is never a winner in a collision. Most of the time both parties are at fault. Following distance is an insurance policy for safety.