Besides its use as a delicious beverage, sake (nihonshu) is used as a flavoring in the Japanese kitchen to add some "hidden flavor" to a particular dish, to bring out the aroma or, in the case of fish, the cover up the fishy smell. In simmering fish and poultry it also acts as a tenderizing agent.
In Japan, also special cooking sake (ryorishu) is sold. This is usually very cheap, because it has been made unfit for consumption as a beverage by adding salt and vinegar. It therefore is not subject to tax on alcoholic beverages. In other cases umami elements and sugar may have been added. This cooking sake invariably has a rather chemical constitution and I advise not to use it.
It is much nicer to use real sake. I often put the left-overs (the last bit in the bottle) of sake away to use in cooking. For example, Junmai-shu is very suitable for this and gives a wonderful "hidden taste" to your dishes!