Google Alert is an email update of the latest relevant Google results (web, news, etc.) based on your choice of the search topic. It is great for spying.
It's rubbish. I signed up for 2 different searches on one of my websites and all they send me is 2 or 3 links per week.
I've signed up for google allerts for come months now, found it quite interesting, I get daily emails for some of the allerts (e.g mobile phones, SEO..) It's interesting if you want fresh reads about stuffs that interest you.
It's also a good source to use to see if any content you wrote got picked up by Google. Sure, you could do a search in quotes for your article, but it feels good when it gets delivered to your inbox.
Google Alert is good if nobody write to you or that it is a mtter of life and death. Like you are dead if you don't read it. Let say you want to be well informed about a particular topic. Why bother with Google Alert? Go to news section of Google, Yahoo! and type, say "shiloh".
Just enter your own name as google alert and see how your name spread out in the web (;-) Google Alert can be used also to find potential link partners. Just give a keyword that describes your business and everytime a new site get indexed you get notice. Then you can ask for reciprocal links.
I use it on my domain names. To see which new pages that reference my sites show up in google. Nice service.