To quote fom "Ask Tom Oracle":
pipelined functions are simply "code you can pretend is a database table"
pipelined functions give you the (amazing to me) ability to
select * from PLSQL_FUNCTION;
anytime you think you can use it -- to select * from a function, instead of a table, it
might be "useful".
As far as advantages: a big advantage of using a Pipeline function is that your function can return rows one-by-one as opposed to building the entire result set in memory as a whole before returning it.
The above gives the obvious optimization - memory savings from something that would otherwise return big result set.
A fairly interesting example of using pipelined functions is here
What seems to be a good use of them is ETL (extract/transform/load) - for example see here
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