It's called the whammy bar and it varies the pitch of the long note you are playing. It is not needed to play any of the songs up to medium level (as far as I have got) and I suggest it is optional to add an element of improvisation to your play. Also, it pulls the star power out of the star notes allowing you faster access to the accelerated scoring.
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The whammy bar, as the other responders have described it, is activated by wiggling it back and forth on the long notes in Guitar Hero. It has aboslutely no function except that it makes the pitch of those notes go up and down if you feel like it. You need to hold down the same fret button throughout the entire long note, however, and it sounds like that might be giving you trouble. When you see a long note, hold the button, play the note, then keep holding the fret button but don't strum again. Now, with your strumming hand, you can push on the whammy bar to change the pitch of the note.

When you use the whammy bar on a long Star Power note, you'll get extra star power for as much as you can wiggle the bar until the long note ends, so long as you don't let go of the fret button.

You can use Star Power to increase your score, or when you're failing the song. Activate Star Power by raising the guitar up to hold it straight up and down. You're activating an internal sensor that recognizes the change in orientation, so its best to hold the guitar fairly horizontally while you're playing regularly, so that it registers the motion to activate Star Power.

If you're failing a song, using Star Power will help you to get back into the green on your meter. It causes notes to count for more positive motion on the rock meter.

If Guitar Hero is frustrating you, a big help can be the tutorial mode. Play through that and you'll get an education on how to play the game and about using Star Power, the whammy bar, and hammer-ons and pull-offs, all of which can make the game easier.
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