Many people believe that Squidoo lenses are looked on more favourably by Google than just a normal website because it's on a high PR domain with lots of backlinks. People use Squidoo lenses in 2 ways for SEO: 1) Create a company profile and direct visitors to your actual website. The idea being that the squidoo lense may in fact rank higher than your own website and direct visitors to your site. 2) Use a squidoo lense purely to get the backlink to your site and help get your own site a better rank. In my opinon I can hardly see any of these 2 methods being useful. It's just one link, I doubt it'd make a major difference to your rankings and as for diverting people from your squidoo lense to your actual site, I think it's pretty unprofessional, far better that your actual site ranks better.
Squidoo has many benefits. It's free and you can build as many pages as you like. You can use it to share your views, promote products or affiliate links, drive traffic to your website - the possibilities are endless!
Squidoo is great as a blogginf platform as it gets high number of visitors due to the interrelated network of all lensmasters.
Squidoo actually splits some of its ad revenue with you aswell, so you can earn some extra money from it! I still prefer adsense though
Aside from SEO. Common people who have no interest in SEO or making money online and all that Jazz use places like Squidoo because it gives the sense of personal reward. When an author makes a lens, they feel as though they have made something better for people who visit it. A lot of people are very passionate about sharing their views, opinions and knowledge about a topic. More people than you would realize are more concerned with this than even money. These same people, ironically, typically have no clue that they can make money online, or even have any remote clue about how search engine optimization works.