I have seen ppl maintain their original E. coli culture in glycerol instead of using plates. Is there a reason why glycerol is used??

Usually, large culture collection centers freeze down bacteria such as E. coli in glycerol (different amts usually range from 20-50%), which acts as an anti-freeze, preventing the formation of small spicules of ice that can puncture cells.
Storing E. coli in plates in the cold room is a rather inefficient, labor-intensive method, that can lead to strain drift with repeated clonings. If you do want to store them in a cold room/refrigerator (e.g. some transformed cells may lose the vector on thawing), performing stab cultures may actually work out better.

what are stab cultures?

Stab cultures are made by piercing a solid agar medium in a test tube with an inoculating needle covered with the bacterial inoculum. Usually used for cultures of anaerobic bacteria.

Here is a link for a basic procedure for the preparation of slant and stab cultures.

Link: http://cfcc.edu/faculty/jjenkins/courses/msc180/lectures/slant_stab_broth.doc

For long term storage, certainly freeze in glycerol at -80C.