I did this thinking about how awesome it would be to watch whole movies on a device that fits in my pocket. The experience isn't actually that great. It's okay for short clips and watching parts of movies at a time, but it gets difficult to watch a full movie on it, especially when my laptop is nearby, which it usually is.
It depends on the scenario.
If you are in a plane, and the inflight movie sucks, or you are in 3rd class and have to share 1 screen with half the cabin, regardless how small the screen is, it sure helps passing the time.
FOr me, I have to take my in-laws to doctor appointments on a weekly basis, and I have a w510 flip-phone with (I think) a 1" screen, and crappy as it looks and sounds due to the low quality 3gp format it handles, I have a full season of 2 1/2 men on it, and its a godsend to me. If you are waiting for 2 hours, after 1 episode you really don't care its a small screen.
But if you have a larger-screen device nearby, its hard to justify though.