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A cantina is a social gathering point in the Star Wars universe. It is a place where people, often Smugglers, Bounty Hunters and other criminals congregate. There is often live entertainment, such as musicians or dancers. Cantinas are good places to pick up additional members for your group. They are also home to a unique type of vendor, the Cantina Vendor, who sell jukebox tokens for 100 credits a piece. These tokens can then be used at a jukebox to play a song of your choice from that jukebox's selection. Many cantinas also have Quick Travel Destination Points in them as well.
Cantinas are also a type of Rest Zone, meaning that while you are in there you will not face a combat situation - in most cases - and you will log out immediately if you do so while in one. Exceptions to the non-combat generality are situations such as the Dealer's Den Cantina in Coruscant's Old Galactic Market District, where certain missions while have you fight in a back room. There are some giveaways that you may have to fight someone in a back room, the words "YOU ARE NOW LEAVING A REST ZONE" will appear in yellow in the middle of your screen and in your conversation log, and in most cases you will travel through a colored mission barrier first.