Oligodendrocytes are a variety of neuroglia. Their main function is the myelination of nerve cells exclusively in the central nervous system of the higher vertebrates (in the peripheral nervous system the same function is carried out by the so-called Schwann cells). A single oligodendrocyte can extend to about a dozen axons, wrapping around aprox. 1mm of each and forming the myelin sheath.
The nervous system (e.g. of humans) depends crucially on this sheath for insulation (decreased ion leakage and lower capacitance of the cell membrane), an overall increase in impulse speed (saltatory propagation of action potentials) and miniaturization (impulse speed of myelinated axons increases linearly with the axon diameter, whereas the impulse speed of unmyelinated cells increases only with the square root of the diameter).
Although they are part of the nervous system and very closely related to nerve cells, like all other glia cells the oligodendrocytes have a supporting role towards neurons and are probably not involved in signal propagation themselves.