It's not entirely clear what you're asking. Locking ensures that only one user attempts to modify a given row at any given time. Row-level locking means only the one row they're modifying is locked. The usual alternatives are to either lock the entire table for the duration of the modification, or else to lock some subset of the table. Row-level locking simply reduces that subset of the rows to the smallest number that still ensures integrity.
The idea is to allow one user to modify one thing without preventing other users from modifying other things. It's worth noting, however, that in some cases this can be something of a false positive, so to speak. A few databases support row-level locking, but make a row-level lock considerably more expensive that locking a larger part of the table -- enough more expensive that it can be counterproductive.
Edit: Your edit to the original post helps, but not really a lot. First of all, the sizes of rows and levels of hardware involved have a huge effect (inserting an 8-byte row onto a dozen striped 15K SAS hard drives is just a tad faster than inserting a one megabyte row onto a single consumer class hard drive).
Second, it's largely about the number of simultaneous users, so the pattern of insertion makes a big difference. 1000 rows inserted at 3 AM probably won't be noticed at all. 1000 rows inserted evenly throughout the day means a bit more (but probably only a bit). 1000 rows inserted as a batch right when 100 other users need data immediately might get somebody fired (especially if one of those 100 is the owner of the company).