You don't need me to tell you about the Flickr phenomenon, just to point to the travel players trying to take advantage of the traffic and community that comes from photo sharing. A not-so-new player that I came across while reading the New York times online is HotelsByCity.net.
On the fun side - I love the bed jumping competition photos section - huge collection of photos of people doing jump after jump after jump including wackos in their birthday suits, dressed in costume and risking life and limb.
On the features side - they have an outline map of a hotel showing the rooms/locations of photos submitted by users (here is an example from the Grand Hyatt in San Fran. Note - not all hotels have this feature.
On the business model front - there is strong consumer benefit in having access to photos not fluffed by the hotel. Further (assuming they have the scale they claim) this is great at driving repeat visitors and customer retention. Their business model seams simple - use photo driven content and community to drive traffic to the booking engine. That said, I made three searches in three cities and could not get a rate or booking option. Hotel results were posted with photos, maps and reviews but attempts to get to a confirmed rate and booking page failed every time. The main error message was that my check-out date did not come after check-in but (a) that was not true (I triple checked each time) and (b) there is no chance to confirm or correct on the error page, you have to use the back button. So - great content, great PR generator in the bed jumping but can end up a waste of time if people can't book anything.