IIRC (never had it myself);

1) Station names. No need to wonder if 97.4 is Radio Whatever. Useful for when you're tuning in late to a sports event and you find commercials. Waiting 5 minutes only to find that you got the wrong channel is frustrating.

2) In conjunction with (1), RDS enables receivers to always tune to the strongest frequency for a given station. This may not sound particulary useful to those US denizens where one transmitter covers practically a whole state, and is the only source of that station, but in the UK, most of the stations are national, and broadcast from multiple antennas. To avoid problems from multipath reception they broadcast on different frequencies. RDS can automatically switch to the stronger frequency when necessary.

3) TA - RDS can interrupt regular programming with local Travel Announcements. So if you hit a tailback, you can switch on TA, and you'll get the next local announcement - regardless of which station you are listening too. (IIRC). ISTR my friends leaving TA off most of the time because the interruptions become too frequent.

IIRC, there's some other capabilites as well - such as being able to broadcast extended textual data - but I'm not sure if that's ever used..