The tree was used by the Shadow Angels to reproduce: by pollinating it with the Solar Wing, the tree would bear fruit that would give birth to new Shadow Angels. Its true function was that it literally contained the world's life force: if the tree died, then its roots would crumble and tear the planet apart.
In the event that it was not pollinated by the Solar Wing, the tree had the capability to self-pollinate. This would cause the tree to wither and die, but it would produce a single "genesis fruit" that would eventually bloom into a new tree. However, this was never demonstrated in the series itself.
In episode 26 of Genesis of Aquarion, the Tree of Life was pollinated by the Solar Aquarion. However, rather than birthing a new race of Shadow Angels, the tree began dying. It was revealed that a Solar Aquarion piloted by humans was not enough to pollinate it: one of the pilots needed to be a Shadow Angel.
Though the Tree died, its role was replaced by the Aquarion, using the Infinity Punch to stabilize the planet. Unfortunately, this cost the pilots--Apollo, Sirius de Alisia, and Toma--their lives. For unknown reasons, a side effect of this was that the Earth was split into two parallel realities: Vega and Altair.
Currently, the Aquarion acts as the focus of the lifeforce of the planet Vega. It is unknown what focus, if any, provides the lifeforce of the planet Altair. Given the information above, it is possible that the previous Tree did manage to produce a genesis fruit before dying, and Altair is a new Earth created when it bloomed into a Tree of its own.