In many cases the letter of intent can make a difference. It's in the department's interest that some proportion of the admitted class be hoping to stay on for doctoral study: they will need incoming doctoral students in 2013 and if none or too few of the Masters course students are looking to stay on, they are going to be buying several pigs in pokes. In the case of the Cambridge MPhil in Economics now being for some reason discussed this is avoided by the dual entry tracks, but that is by no means true of all courses and the question of whether you are viewing this as a terminal qualification or as a staging post to research is something the department will want to know.