Name proles comes from latin work for worker; used also by Karl Marx as a proletariat referring on working class. Party is using them as a labour in factories; actually that's their only purpose. They are uneducated and stupid, and Party doesn't wish that to change. They are not aware that history existed, that there once was a free will, free ideas and freedom of speech. They are kept in constant fear and they believe that Party keeps them from safe from Oceania's and Eastasia's treat. Party does not control their way of life like they control Party members. They can have friends, family, lovers and sex is actually welcomed: more kids will produce more labours for factories.
Keeping them in fear and uneducated assures peace to Party and removes any possibility of rebellion. They cannot understand what is really happening, that everything looks like Party wants it to look, and not like it really is. But, like Winston said, hope is in the proles; they are the only one who can change something because there is no way that any Party member would act against Party.
P.S. Any comments and ideas are welcome; unanswered questions also.