Found this on about.com:
Question: Why do Some Coins Have Denticles?
Answer: Denticles are the little tooth-like design elements that you see around the perimeter of many 18th and 19th century U.S. coins. The reason for denticles was to make the coins stack more easily, back in the days before the coin minting machines had close collars applied while the planchet was being struck. (The close collar helps build a solid rim around the faces.) Because people got used to seeing this element on the coins, denticles remained in abbreviated form long after the need for them had been eliminated.
Ken