My favourite two reasons for using it:

1. I often tend to use it when I want to pipe the output into a command. If it's a big transfer, I don't really want to have to stream several gigabytes of data onto disk, then off it, then back on again. Restoring a database dump is one example:

  me@host1$ nc -l -p <port> < db_dump.sql

  postgres@host2$ nc <host> <port> | psql db-name

2. The other big advantage over scp is that sometimes, your target (deliberately) isn't accessible directly from an SSH login.

In the example above, I want to process that data as the 'postgres' user, but there's no way I'm allowing direct logins as that user. 'root' is, of course, the other common example.

Firstly, if the two machines are on the same switch this method is noticeably faster than scp'ing something large. The actual main reason though, is that this isn't limited to tarring over a network. What it comes down to, is you can almost seamlessly have a shell pipeline and one of those stages jumps a machine boundary.

I see. Gotta love netcat.