What Is The Tiny Mushroom For In Pokemon?

In firered/leafgreen its used for learning a move again in
ruby sapphire emerald and platinum diamond pearl and heartgold soulsilver
you just sell them so you can't use it in any OTHER game besides fr/lg

It depends on the game... In some games you may use them to trade for some rare items or give them to move tutors... And, of course, you may sell them.
Of course they don't give you lots of money, but... Its an option
hope I helped ;)