I am recently re-converted to del.icio.us . People explain it as a social bookmarking tool, and it can be used that way.
For me, it’s really about the tagging. I use it several times a day to mark website, articles and such that I want to return to later. By assigning tags (or keywords) to the pages, I can categorize them with more detail that I could when I placed my bookmarks or favourites into folders. It’s also online, so I can check my tagged pages from home. Using some RSS code that I lifted from Jason, I feed the newest links onto my wiki page.
Some day I’ll learn about the social part of it all, but for now it’s doing more for me than the folder system in my browser ever did.