I don't know about that particular high school project, but in general, you use a PID controller for a continuous channel of control. For example, if you have an encoder for motor speed, and want to drive motor PWM to make the motor rotate at a particular speed, PID can implement that. Similarly, if you have an analog input for how far left/right a line is, you can create a PID controller to output the "turn" signal to follow the line straight. (You can also create various kinds of oscillation by not setting the P,I,D values right :-)
However, "line followers" typically also need to make decisions, like whether to go left or right at an intersection; those kinds of decisions cannot use PID controllers, because that's a higher-level logic function.