Technically, it is suppose to boost contrast in low contrast areas (i.e. white wedding gowns with subtle transitions and the like) I mainly use it when there is a lot of sunlight that washes out certain areas of an image. Dunno if it really works since I have not done a head to head comparison. It does slow down burst mode shooting so I have it as a custom function setting on my 40D when and if i need. Otherwise it is set to off.
With digital photography...the ideal exposure may not actually be what looks the best at the time of capture. Looking at the histogram, the ideal exposure is not a balanced graph.
Actually, for digital photography (and digital editing)...the ideal exposure is one where the histogram is biased toward the right (bright) end of the scale...but without 'clipping' or loosing the highlight detail.
You can learn more about this by searching 'Expose to the Right'...see HERE.
From what I can tell, highlight priority mode will give you an exposure that is as bright (or to the right) as possible, without blowing out the highlights. Sounds like a great feature to me.