Jakob Nielsen reports in his Alertbox that breadcrumbs used for navigation are becoming more useful.

He states the following reasons:

• Breadcrumbs show people their current location relative to higher-level concepts, helping them understand where they are in relation to the rest of the site.
• Breadcrumbs afford one-click access to higher site levels and thus rescue users who parachute into very specific but inappropriate destinations through search or deep links.
• Breadcrumbs never cause problems in user testing: people might overlook this small design element, but they never misinterpret breadcrumb trails or have trouble operating them.
• Breadcrumbs take up very little space on the page.

He concludes that although some people ignore them, for the visitors who do look for them and use them they add to a favourable usability experience.

As I’ve long argued, breadcrumbs are different than most other little-used design elements for the simple reason that they don’t hurt users who ignore them.

Read complete article http://www.useit.com/alertbox/breadcrumbs.html