Garrett Dimon has a good primer on microformats.
The article provides the basics, some examples and scenarios:
"We’ve already covered the benefits of microformats being human-readable, but
what about “machines”—you know, search engines? One example is the elemental
rel="nofollow". By adding this element to your anchor
tags, you’re telling search engines not to give any weight to those links. This
is just one of many machine-readable microformats.
Imagine for a moment a future where search engines recognize microformats and
take advantage of their inherent metadata. You could find reviews for specific
products or pages, vote for or against a site when you link to it, or track the
development of a conversation across multiple sites with minimal effort."