Believe it or not, there are still programs that require blazingly fast bit operations. I used like ten different bit hacks for a game engine I wrote which uses bitboards[1].

[1] http://en.wikipedia.org/wiki/Bitboard

Bitwise operations pop up fairly often in advanced data structures (Hash Array Mapped Tries, Bloom Filters, etc). The big advantage in my view is being able to perform complex, data-intensive tasks in otherwise limited environments (e.g., mobile devices).

There are algorithms that use bits just like there are algorithms that use trees. You wouldn't expect your compiler to write your algorithms for you, would you.

Just recently, I've used the bitboards representation for cellular automata (which lets you compute 64 cells at the same time by doing about 100 non-branching integer instructions). I have difficulty seeing a compiler that can recognize that algorithmic optimization.

It's no surprise this is hosted on graphics.stanford.edu.

Might still be useful for some embedded applications.