Hi Notcontent:
Agree with what Hassled and ReallyTired have to say.
Also not educated in UK and find system strange, but I suspect if you look into how things are done in your home country some form of standardised testing controlled by the state is undertaken to ensure that children are reaching the notional targets for attainment and tax payers money is being spent appropriately (i.e. value for money). PISA (www.oecd.org/pisa/) wouldn't exist unless countries were regularly implementing standardised tests.
For Y2 most of the results are based on teacher assessment rather than the standardised tests, although the children will also sit those. In fact the likelihood is that the will sit optional SATs in Y3, Y4 and Y5 as well. My impression is that the standardised test results are used to 'back up' the teacher's assessment.
Should you be worried or upset by it? Frankly, no. It's a safety net and a useful alarm bell for you. If your DC's results come back great (NC Level 3) or good (NC Level 2) you'll feel content and pleased that your DC is on track. If they come out low (NC Level 1) which was the case for DD1 for me - that's a real wake-up call. It alerted me to the fact that whatever was going on at school it wasn't working. For us, the solution was an on-line maths tutorial and more regular practice (little and often) to help DD1 'get it' with maths.
I'm every so grateful that the KS2 SATs came along. I had been asking questions since late Y1 at the school, but was constantly being told that 'In England' we do it this way, or things are much more relaxed, etc.... I wondered how never having a formal sum to work with could be a good thing. DD1 seemed to be endlessly colouring in patterns for maths homework and it wasn't solving the problem - literally - she couldn't subtract and could only add up to 20, by counting fingers and toes (skills she took from nursery school by the way).
It's the system. It's not going to change and you really can't buck it. So my advice is to embrace those bits of it that you respect or can see benefit your DC and if you think it is useless - that's actually brilliant - it will help your DC not to be so wound up about tests.
One of the very interesting things I've observed is at home DD1 talks eagerly about her mock SATs she's been sitting this week (she actually is enjoying them now that we've put in all sorts of extra work to make up lost ground) - but at school she moans with the best of them. It really is important to teach children to take these things in their stride as early as we can - because they will have years of standardised testing and exams ahead of them - there's no avoiding it.