Microformats are a way of adding more meaning to your web content. For example, you can use a hCard format to display business card information or hCalendar for event information. What is the benefit? By adding some meaning (semantics) to the various web elements on your page, you will increase the quality of searches (as search engines start understanding these formats).
There is a Microformat Primer on Digital Web Magazine. A list of Microformats are available in the Microformat Wiki.
Some potential ideas to leverage Microformats:
– Create RSS streams from Microformats (for event information)
– Create gadgets for Microformats (gadgets are web components for Microsoft Live.com)
– Create widgets for Microformats (widgets are web components for Yahoo Konfabulator)