A local shop'll give you a better price. No computer codes or anything involved so there not as much reason to have the dealer do it. It is a fairly routine thing to do to a car, especially where they salt the roads.
What do they do? Things mount to them, especially if you have drum brakes or those dual disc/drum brakes where the drum is inside the rotor and works as the e-brake. They sheild your brakes from incoming rocks, sand and water from under the car; they sheild your shocks, ball joints, etc from radiated heat from hot rotors, and they contain brake dust so that it goes out your rims rather than under your car.
Not sure if a splash of cold water on a hot rotor would warp or crack it, but it would probably cake up the brake dust.
All that being said, I think race cars don't have em, but they're not offroading...
EDITED:
If you are going to do it, you might consider replacing the wheel bearings, since that should only add the cost of the parts. Not sure the useful life of landcruiser wheel bearings, but they are a wear item that eventually gets replaced. The 700 for parts mentioned above might include those bearings, new seals and other goodies. Point is, doing brake backing plates gets you a few parts replaced that would eventually get done. So, its pricey but its cheaper than doing the two jobs separately.