When a baby is born, according to neurologists, it has no ego, no sense of "I", and does not distinguish a separation between itself and the world around it. That baby's parents are extensions of itself, which may be why they get so frustrated when we clueless adults don't understand their needs- it feels like a malfunction of selfhood. Gradually, through experiences like these, the child builds up distinctions between itself and the world, but this is a learned thing; it's a reaction to the push-pull of the world around it, and as such a necessary survival mechanism.
As the child grows it develops a narrative about itself; "I like bananas but hate melon"; I am good at baseball but feel embarrassed when I make a mistake", etc, up to the entire elaborate stories we build around ourselves; our tastes, inclinations, and the way we see the world around us; and more importantly, how we wish the world to perceive us. Because these things are tied to the function of surviving and thriving in a group society, our minds are constantly honing this thing, and as we relate to the world around us, we see it through the filter of someone possessing this thing, and it effects everything we see and do. Nonetheless, in many ways the ego can be seen as a construct of language, although it does have strong bioligical underpinnings.
In a powerful psychedelic state, we leave this heavy, cumbersome thing behind (or at least parts of it). Many who experience ego loss, even many times, often feel giddy about it; "Holy cow, I cant believe i always carry that thing around... What a relief!", although it can also be shocking and disorienting- some even confuse it with real death, or think they have lost their minds.
So I don't really think of the ego as being a distinct part of the mind, but rather a filter that the mind interfaces reality through. It serves many necessary functions: interacting with others is made easier, and possibly richer, because of it. I'm an artist, and in some ways my ego is my brand; people pay not just for the work itself but for the value of the artist as perceived within society. Ego is involved in almost every conscious thing we do. Our egos sit and look over our shoulders as we sit here typing about the ego. I'd be lying if I didn't admit that I'm interested in hearing your responses to this post, as that reflects the way I am perceived in the group here. Hey, I'm just a damn primate, gimme a break.
On the other hand, being aware of your ego, knowing when and why your decisions and perceptions are effected by it, can be very liberating. It's great not to worry about your unglamorous car or shoes or whatever, when so many people get absolutely immersed in these concerns. That way you can live your life according to what you feel is right, as opposed to what you think others might want. I think that psychedelics can give us the perspective to understand these things better and to make permanent changes to purselves in that direction.