Other than entertainment, is there a real reason to use a screen saver? Does it somehow "save your screen"?
It used to, when screens used to suffer from burn-in. Nowadays they're mainly used for fun, and to lock the computer when you're away from it.
The Apple TV includes a screen saver (photos from the photo album) and periodic changes to the music playing interface to prevent burn-in of plasma TVs.
There is a myth out there that LCD displays do not suffer from burn in. This myth is false. I have personally witnessed LCD displays suffer from burn in on multiple occasions.
The big one that comes to mind was a client of ours with a display that need to be visible 24 hours a day. This is a trucking company that needs the display to be visible when drivers would come in to check their assignments, even in the middle of the night. The window manager artifacts from the screen shown in that app soon burned into the screen; it was a matter of just two or three weeks.
But this was an exceptional situation. LCDs are generally less susceptible (though, as I hope I've shown, not immune) to the phenomenon. In most situations, this just isn't an issue.
If you want to save a few bucks, you can use the blank screen option to lower your power use. Just make sure you have it set up right so that the backlight is actually off, and not just obscured with blackened pixels, otherwise you're not really doing anything.
You can set up your computer to lock automatically when the screen saver kicks on. It's not a big deal at home, but in a lot of businesses it's required.
Yes, it used to be a feature to prevent images being "burnt" into CRT screens:
Before the advent of LCD screens, most computer screens were based on cathode ray tubes (CRTs). When the same image is displayed on a CRT screen for long periods of time, the properties of the exposed areas of phosphor coating on the inside of the screen gradually and permanently change, eventually leading to a darkened shadow or "ghost" image on the screen.
Therefore, providing a moving image worked around this. Now they are really only for entertainment.
A screensaver is used to prevent burn-in, or having pixels stay the same color due to being exposed to a particular color too long.
Although, this really is not needed any longer, as most people do not use CRT's anymore.
There's a pretty good description on the Wiki page for screensaver.
Screensavers used to server a "real" purpose by preventing screen-burn, "a permanent disfigurement of areas on a CRT display caused by non-moving text or graphics being displayed continuously for long periods of time". On modern monitors though they don't serve any purpose except entertainment.
Yes, I use http://community.electricsheep.org/. It impressed my girlfriend.
I find screen savers entertaining and I use it to secure my machine while I am away.
I always turn on "Require password to wake this computer from sleep or screen saver" in the Security Preference Pane.
If you use it as a security measure be sure that you don't get the warning about the display going to sleep before the screen saver activates. If you get this warning the screen won't lock once the display is asleep.
I also set hot corners to activate the screen saver immediately. From my old days running "After Dark" Upper Left to disable the screen saver and upper right to activate it immediately.
Plus, screen savers are fun to write.