Probably the biggest benefit is when you want multiple prompts (of various types) group together and with some sort of formatting to make it all a bit more stylish.
One step further is to use a report with only a prompt page (call this a menu) and use this as a starting point to pass parameters (prompt values) to individual reports.
I wasn't very much convinced about Cognos when I first started to work with it, but the tooling regarding prompts etc is pretty good stuff..
I agree with Ties re formatting, particularly when dealing with interactive reports. Plus you get more control over the prompts, such as setting default values or including static choices.
It is nice to create a prompt page that fits with the overall look and feel of your report. I haven't had to do any of the advance prompting techniques you mentioned, but it's nice to know they are there if necessary.
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