I'm using it to access my library of nearly 4,000 MP3's (digitised from my 400 or so CDs) from my server via Windows Media Connect which then gives me seamless integration with Windows Media Player. If you live in the Mac world it also integrates directly with iTunes.
I'm also using it to listen to internet radio. The current production firmware (2.3) only supports MP3 streams and most radio stations are using Windows Media Audio (WMA) but that's supported by the 2.5 beta which I've downloaded and seems to be working fine.
Considering the small screen the one thing I was worried about was the user interface, so much so that I nearly spent an extra $50 for a higher model which has a bigger and better screen. I'm glad I didn't because the user interface is well designed and quite functional. Plus there are several free applications available that let you control it from your PC, the best of which is VisualMR.
So what all that means is I'm sitting in my office loft in Steamboat, listening to the ABC radio from Australia playing through my living room sound system and when the phone rings I can turn down the volume via my PC, or I can change to a different feed or select music from my library to play.