An underinflated tire may not carry the designed load and builds up excessive heat that may result in sudden tire destruction.
Over inflated tires may suffer reduced grip and may wear out the tread center. Over inflated tires may be more prone to puncture and damage of the sidewalls.
Braking distance is also subject to the tire pressure. The braking distance of a properly inflated tire is shorter than that of an underinflated one
Tire pressure should be measured when tires are cold - that is, they have not been driven on.