Steel nails, along with other nails, are primarily used in the Construction skill to make various low-level furniture. They are made with a steel bar on an anvil with a hammer in the player's inventory, requiring level 34 in smithing and receiving 15 steel nails and 37.5 Smithing experience per bar.
These nails are the only nails that non-members can create, as they are used in the Dragon Slayer quest. Members can use them to construct certain types of wooden furniture. Steel nails are tradeable, can be bought at the sawmill operator and are quite cheap. However, they break occasionally.
Besides just construction, steel nails are also necessary to complete a few quests.