I think that the previous posts have by and large covered most of it but let me summarise.
As per my understanding, a preamplifier does the following tasks: -
1. Provide impedance matching between the source and the power amp.
Different types of music would load the amp differently. Some like Western Classical and Hard rock put more load while some like Jazz are easy on the amp.
To be able to play all kinds of music without putting undue strain on either the source or the amp, the thumb rule is, 1:10 i.e. the output impedance of the source must be 1/10th of the input impedance of the Amp or lower.
2. Provide volume control
Traditionally this is done through a potentiometer which is nothing but a carbon based variable resistor. Due to the moving parts involved, this is bound to induce noise into the system the quantum of which is inversely proportional to its cost.
Newer (at least for me) ways of volume control have now come up using 'Light Dependent Resistors' 'Transformers' and the digital ones.
3. Source Selection
Since majority of people use several sources like CDs, TTs, Media players, DVD/BD players, STBs, it provides a convenience of switching between several sources without one having to take the trouble of swapping I/Cs
Can the preamp be eliminated? Yes it can be but subject to above.