When CraigsList first started they been amongst the first to start online classified ads. That gave them the boost. CraigsList get huge traffic, thats what make it more popular and useful to many.
First off, it's Free, as Chris Anderson said in his recent Wired cover story: Secondly, the site is insanely easy to use, some poor UI decisions here and there (I want it to look like this! http://craigslist.thebignoob.com/), but they solved a common problem with a simple to use site and being the first they created a monopoly. Good word of mouth doesn't hurt either, as well as, it's entered pop culture — they can't lose now!
i heard about them when i moved to U.S and now i am on there all the time searching for car parts and all sorts of good stuff... it's a great site and i don't care about their designs...of course if it had a better search engine it would have been a lot better but frankley i don't care... craigslist rocks...