I've owned three PDAs since high school and I consider myself an expert on them. I love them. That said, they certainly aren't right for everyone or all tasks. Here's a basic summary.

PDAs are good for:

• Output. Retrieving calendar/contacts/lists really conveniently wherever you are. Viewing simple documents.
  
• Viewing compact web pages, like news feeds and blogs, either "live" through WiFi/cellular or viewed offline through AvantGo.
  
• Digital audio recording/playback, like recording lectures or meetings.
  
• Playing card, board, turn-based, or basic action games.
  
• Basic email receiving and sending.
  
• Reading e-books or other texts.
  
• Little helpful utilities such as units-of-measurement converters, timers, etc.
  
• Little databases like recipies, drinks, etc.

PDAs are mediocre for:

• Playing music. Mediocre sound quality, capacity, and battery life compared to dedicated players.
  
• Playing videos. Low capacity, low resolution, too-slow CPUs for high-end encoders like Xvid at full resolution.
  
• Video game console emulation. Uncomfortable button layouts, horrible D-pads. Not up to full speed for SNES yet, even on the 400 MHz XScale.
  
• Basic spreadsheet manipulation and input of new data into existing sheets.

PDAs suck horribly at:

• Input. While MS Transcriber on PocketPCs is a huge step forward, it still doesn't work quite well enough for most people, and nothing can replace a full-size keyboard. PalmOS devices are even worse, with fewer input options. Forget about anything longer than a simple calendar or address book entry.
  
• General web browsing. Get used to a lot of horizontal scrolling, pages not rendering in usable layouts, and sluggish performance while rendering complex pages. Even with the highest-resolution screen out there, Toshiba's e800, you're still only 480 pixels wide. Resize your browser window to that size and see how much you can reasonably accomplish without using the keyboard.
  
• Word processing or other text editing. See "Input."
  
• Spreadsheet creation beyond very basic functions.
  
• Being a calculator. Why can't anyone make a decent calculator program? I expect a $400 PDA to have at least vaguely similar functions as the $60 TI-83 I had in high school. So far, none even come close. You can get a TI emulator, but it runs so slowly that it's unusable.

Knowing this, if you still want to get a PDA, then it's probably right for you.