For each donut-like yellow thing you pick up, you gain a bit of experience. If you manage to collect several in a row without getting hit, this counts as a combo. You can see my mad combo skills in the screenshot, of course. Collecting combos is a good thing, because a ten-point combo gives you for more experience than just collecting ten dounts one by one (getting hit in-between).
Having experience is useful, because once you die, you get to a screen where you can upgrade your skills. You can learn to run faster, double-jump (and then double-jump higher), and duck. You can also gain more armour so that getting hit won't kill you so quickly.
What makes this simple game so addictive is that when you die, your experience doesn't reset. You just go back to the same level, or another level of your choosing, and keep accumulating more and more experience. Lots of fun, especially if you're into the whole retro-gaming thing.