TV over IP
A popular use of multicast is the distribution of television services.
Imagine the cable tv and satellite scenario - big pipe into the home providing tremendous bandwidth that allows every channel to be received by the home user at the same time.
Using multicast for television delivery instead puts the emphasis of the subscriber only tuning into what they want to see. If you turn to channel 2, you are actually tuning into, say 22.214.171.124 which is simply an mpeg-2 stream wrapped into a UDP header.
As you change channels, you are actually tuning out of the first channel in order to join the second. So in terms of multicast, you leave one group and then join another - so atleast IGMPv2 is required.
Companies like Nextstream and Tandberg have made high quality mpeg-2 encoders that compress very good quality content into, say, a 2.7 MBPS stream. Many subscribers who are on modern DSLAMs (the telephone company's device that terminates your ADSL connection) and who have a loop lengths (that is, distance of your copper pair to the DSLAM) that are reasonably short, have no problem tuning into such a video.
In addition to broadcast tv, since the service is based on IP, you can also offer complementary services such as video on demand.
Testing is going on in almost every telco in the world right now.
The prices have come down significantly over the last few years - ADSL modems are cheaper, telcos have shorter and shorter loop lengths are they modernize their plant, and good quality mpeg-2 video doesn't require 6 MBPS anymore.
At the telco network, video is pushed out to individual DSLAMs. By having video available right at the edge of the last mile, you don't have to waste time pruning back and rejoining multicast streams throughout the network. This means channel change times rival that of satellite and digital cable.