When I had a Palm IIIc I used to play games on it mostly. =] I liked one called Strategic Commander enough to pay the shareware fee, it was recently updated to allowing play with others via IR which could be fun. I also used it for some of the designed purposes: to take short notes of ideas and stuff, enter the few appointments I had and writing (but never reading...) a todo list. =]
Actually, I also used it to do some reading on it, it is much more convenient than a large book, and it can even hold lots of them at the same time. And there is an added bonus of being able to have a dictionary to look things up in when necessary.