Given my work is all so ethereal, moving electrons around and sometimes turning them into photons, it's nice to have something mechanical, hand-crafted nearby.
It also has some permanence -- all the electronic gadgets, where I live, whom I live with, what I wear etc. has been switched out over the last decade, but not this watch.
http://en.wikipedia.org/wiki/Mechanical_watch
EDIT: Seiko created a hybrid watch that I think is really cool. Like a traditional mechanical watch, the sole source of power is a spring, which in turn is wound by the movements of the wearer. However, in place of an escapement, it uses part of the power from the spring to create just enough electric current to excite a quartz crystal, which provides the timing source for the mechanical movements of the watch. Unlike other watches (mechanical or electronic), the second hand doesn't move in steps, but rather rotates smoothly and continuously around the face:
I'm currently wearing the one my girlfriend got me for Christmas and, not only does it make my wrist feel better, it reminds me of her all the time which makes me feel closer to her (sorry for the sloppiness!).
(Here's Ars' review of the iPod nano, in case you're interested: http://arstechnica.com/apple/reviews/2010/09/6th-generation-...)
Then again, I haven't used Nike+ yet. There's always a chance I'll use Nike+ for something and it's nice to know that the iPod nano includes it, but I'm pretty happy right now with Garmin Connect and Garmin Training Center.
The watch I have now is a Casio Pathfinder. It's a big gadget and it is definitely got a bling factor, but I got it primarily because it's an ABC watch (altimiter, barometer, compass). The bells and whistles (sunrise/sunset times, world time, current temperature, solar battery, multiband atomic sync, etc.) are great, but I can't overstate the value of having a reliable compass on my wrist. It's also remarkably comfortable. It's the first watch I've left on overnight and not had a sore wrist the next day.
When I got the Pathfinder, I didn't have a phone with a digital compass, and even though my current phone has one the only time I use its compass app to get my bearings instead of using my watch is when I'm driving and my phone is already in the GPS mount on the dashboard.
Aside from the usual "nice to haves", the only thing I truly wish Casio put in the thing is a heartrate monitor. The watches I've seen so far that have heartrate monitors are just too dorky to wear on a regular basis (I fasten the one I use now to a belt loop). Bluetooth would be the next thing I'd ask for so that I could use its proximity to fire actions on paired devices.
I'm 25 by the way. My guess is that more than half of my friends still wear watches, but people younger than me tend to not wear them any more. They're usually worn as more of a fashion statement than anything, but that will probably change.
It is a sport watch that in my opinion really shines when used in conjunction with optional sensors. I'll be getting Triathlon Pack do that I will have sensors for cycling and jogging in addition to heart rate, altimeter etc. With 100m waterproof I should be able to leave them on when swimming or taking a shower. If the belt is comfortable enough, maybe I won't have to take them off when sleeping too.
I was also an early backer for this iPod watch band. It's something i've wanted since the Nano first came out, and none of the available bands are of the quality/style I like. I preordered the LunaTik because it's the only band i've seen that doesn't make me feel like the Nano will fall out, and it just looks awesome too :)
For whatever the reason, despite cell phones and computers and everything else, I haven't really felt that my watch was deprecated.
It looks less rude to be checking your watch for the time than checking your phone for the time. Nobody knows if you're really checking at your email, videos or playing games, etc.
I'd be more interested in something like the iPod Nano that could be used as a pocket watch. But that means it ought to be rounder.
Now the only time I wear a watch is when I go hiking or camping and truly need one.