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Coins are used in the Coin Launcher or Lottery to win Trophies, and can also be used for Continues and Spectator Mode. They are gained simply by playing various game modes, like Vs Mode. However, All-Star, Classic, and Adventure Modes give out more, about 70 at a time. Vs Mode gives about 10 per battle. During the coin launcher, it is also possible to earn between 10-20 coins by shooting the metal targets down. The most coins you can have at one time in Brawl is 9999, and 999 in Melee, so spending them before that point is generally a good idea. The ending mini-game on Classic mode garners more coins for every target hit, and also gives out more coins per hit if playing on a higher difficulty.
When playing online modes, it costs 1 coin in order to make a stage selection (Selecting "Random" is free).