The vast majority of times, "no pun intended" is used to draw attention to the pun that was just made.
Since the preceding pun may not be readily apparent, it can help the reader go back a few words and catch the pun. Personally I don't use this phrase much, but I'm not a very punny person.
More examples http://ask4essay.com/thread/what-does-no-pun-intended-mean/