While biologists are still not exactly sure what the true dynamics of the relationship are, generally speaking the algae usually provides the food through photosynthesis, while the fungus provides protection from the elements as well as mineral nutrients. The result is a very successful and diverse group of organisms that can inhabit habitats all over the world, including some of the harshest environments on the planet.  In the tropical rainforests, different types inhabit different zones in the rainforest, as can easily be observed by examining a typical trunk with its different colours at different levels.

Lichens on a tree trunk in the forest