There are certain things that only work in maths mode. If your
document is not in maths mode and you have an _ or a ^ character,
TeX (and by inheritance, LaTeX too) will say
! Missing $ insertedas if you couldn’t possibly have misunderstood the import of what you were typing, and the only possible interpretation is that you had committed a typo in failing to enter maths mode. TeX, therefore, tries to patch things up by inserting the $ you ‘forgot’, so that the maths-only object will work; as often as not this will land you in further confusion.
It’s not just the single-character maths sub- and superscript
operators: anything that’s built in or declared as a maths operation,
from the simplest lower-case \alpha through the inscrutable
\mathchoice primitive, and beyond, will provoke the error if
misused in text mode.
LaTeX offers a command \ensuremath, which will put you in maths
mode for the execution of its argument, if necessary: so if you want
an \alpha in your running text, say
\ensuremath{; if the bit of running text somehow
transmutes into a bit of mathematics, the \alpha}\ensuremath will become
a no-op, so it’s pretty much always safe.
This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=nodollar