right now, mostly used for listening to music and as a thumbdrive for files/school.
just recently picked up medal of honor, so been playin that a little as well.
other options: watching vids ive converted w/ pspvideo9, or downloaded rss videos (ie, xplay, cinematech, but mostly the feed)
theres also plenty of demos available. ridge racer 2 demo was the one i played most recently, and there will be a christmas loco roco demo coming out soon too. (demos can be saved to memory stick).
theres also the homebrew path, ie eloader or xloader through the photo option. i used to read manga through this option too.
then theres flash path, more legit, but also still pretty cool. in firmwares 2.7 and up, flash files can be used to be viewed in the psp's internet browser. the ones i use now were part of that "xtel portal" pack, which actually contained some useful flash files like stopwatch or unit converters.
the internet browser itself, i usually use it if no nearby comp was around and i wanted to check on somethin real quick. some sites like psp.connect.com can also lend toward some downloadable vids with new content updated weekly.
rss too, as already mentioned, can now do video downloads along with audio podcasts (firmware 2.80). the ones i frequent most happen to be the g4 and gametrailer ones.
plus there are other nice features like sleep and hold. the psp's a really nice piece of hardware, imo.