Our brains have multiple mirror neuron systems that are active not only during our own actions and emotions, but also when we are observing similar actions, emotions, or intentions in others.
Quoting V.S. Ramachandran : "Researchers at UCLA found that cells in the human anterior cingulate, which normally fire when you poke the patient with a needle ("pain neurons"), will also fire when the patient watches another patient being poked. The mirror neurons, it would seem, dissolve the barrier between self and others.  I call them "empathy neurons" or "Dalai Llama neurons". (I wonder how the mirror neurons of a masochist or sadist would respond to another person being poked.) Dissolving the "self vs. other" barrier is the basis of many ethical systems, especially eastern philosophical and mystical traditions. This research implies that mirror neurons can be used to provide rational rather than religious grounds for ethics (although we must be careful not to commit the is/ought fallacy)."
See: Grasping the Intentions of Others with One's Own Mirror Neuron System
Marco Iacoboni et al. 2005.
Quoting from the Jan 10, 2006 NYTimes article "Cells that Read Minds" by Sandra Blakeslee , an interview with the discoverer of mirror cells:
"We are exquisitely social creatures," Dr. Rizzolatti said. "Our survival depends on understanding the actions, intentions and emotions of others."
He continued, "Mirror neurons allow us to grasp the minds of others not through conceptual reasoning but through direct simulation. By feeling, not by thinking."
The discovery is shaking up numerous scientific disciplines, shifting the understanding of culture, empathy, philosophy, language, imitation, autism and psychotherapy.
Everyday experiences are also being viewed in a new light. Mirror neurons reveal how children learn, why people respond to certain types of sports, dance, music and art, why watching media violence may be harmful and why many men like pornography.