It's just one more piece of data for the big picture... If I'm averaging 22mpg at each fill-up, but my instantaneous mpg shows 28-32 while i'm cruising on the highway, I know that I must really be stepping on the gas at traffic lights and such.
Another way to look at it... minor acceleration/deceleration causes wild fluctuation in gas consumption -- further reinforcement of why cruise control tends to give better gas mileage than foot-on-the-pedal, especially on long trips.
You also can see how cruising at 80mph uses much more gas than cruising at 60mph.
It's just data. You don't *have* to use it. Personally, I feel "out of touch" when I drive my wife's honda and don't have all the fuel data at my fingertips.
EDIT: If you're seeing 20-30-60 in the space of 10 seconds, that usually coincides with lifting your foot off the throttle... think of the data as "feedback" for your pedal inputs.