As simple as it seems, a cover letter serves the purpose of introducing an applicant to a potential employer and, at a minimum, should identify the job that interests you. Ideally, the cover letter will pique enough curiousity that the employer spends a few more seconds on their initial review of your resume, but that is often wishful thinking. The important thing to keep in mind is that a cover letter will not get you an interview, but it certainly can prevent you from getting one.
People generally go into way to much detail in their cover letters. It should be clear, concise and, above all, grammatically correct. It is our experience that most employers will scan the cover letter to see what position interests the candidate (so make sure that much is clear) and then immediately moves on to the resume. This may seem a little cynical, but in a time when there are literally hundreds of applicants for job postings, most hiring authorities will search for the essentials (required skills and experience) and then determine if a more thorough read is warranted. Keep in mind, it is easier to identify skills and experience in a resume than the cover letter.
If an applicant has the requisite skills and experience, then the employer will devote more time to learning about the candidate including the cover letter. Although there may be some pertinent information a candidate wishes to convey in a manner not suited for a resume, a lot of employers spend more time looking for spelling and grammatical errors in the cover letter to get a sense of competence or general writing style. So instead of writing paragraph after paragraph of why you are the perfect candidate, you would be better served to keep it clear, concise and free of errors!