The reason for doing the filtering in the frequency domain is generally because it is computationally faster to perform two 2D Fourier transforms and a filter multiply than to perform a convolution in the image (spatial) domain. This is particularly so as the filter size increases.
In what follows it is assumed that the reader is familiar with the Discrete Fourier Transform, its properties, and the transforms of commonly used functions (delta, noise, rectangular pulse, step, etc).