I actually use the Yelp iPhone app for the use case you mention above, especially when I'm traveling. It does a good job of telling me what's nearby and what's highly rated. I think of Yelp on the iPhone as being low on entertainment value but high on utility.

Right now, foursquare is high on entertainment but low on utility for me – it doesn't help me find places to go or stuff to do. And my hunch is that the smart thing for foursquare to do is to focus on doing entertainment than utility. For example, they've recently started telling you how many other foursquare users are at a given place. I can see some fun challenges / badges / quests around getting 10 foursquare people in some bar at the same time, finding the coffee shop in SF where the most foursquare users check in, etc. That could surface some of the same information but in a less explicit way.

I think you're right – games are limiting. But no more limiting than any other media genre like books, movies, or music. I think these guys are managing to achieve something that most other LBS applications have not – a use case that makes sense to me. Also, I'd argue that casual games can have a really long shelf life – look at things like Bejeweled, Tetris, Desktop Tower Defense, or any of the big hidden object games. Good games with simple mechanics can remain fun for a very long time, so long as there is something fun and evergreen about the experience.

I have a lot of friends, including some of the folks who've commented here, who don't play foursquare competitively (they're not trying to get to the top of any leaderboard) and really would like to use it more as a tracker / recorder of their own movements and places they go. The current version of foursquare doesn't really speak to that use case.

Right now, the audience is limited to the devices they support and the subset of people who use the application. I think foursquare has the potential to be the most popular application in its category – it's too early to say whether or not the category itself is large and interesting.

My big usage case where i see huge value is that I like to run around and tag my favorite restos, bars, stores, etc, review and make notes on them, and also tie these into places my friends recommend. I can then later just say “where's a good cheap lunch spot near where I am?”, or, “I have a date wed night in Hell's Kitchen– where the hell should I take her?” Maybe I already knew a place but forgot, or maybe a friend has tagged something cool and useful. This would be just the beginning of something that adds enormous value to my life.

Sort of a Yelp, but a much more social media-oriented and location-based one. Foursquare isn't quite set up that way (yet?)

The merit stuff is incredibly fun.

The other issue with a “game” is it creates a fairly specific audience — those who want to “play a game”. When I first started using foursquare that seemed immediately limiting to me – I knew large portions of my friends/network would not want to engage given the explicit gaming nature of it. I suppose, though, that makes for a more passionate user base which could compensate for the smaller overall footprint.

Based on the rankings I see in the app it seems there is a small, though dedicated, group using it in San Francisco (measured in 4 figures near as I can discern). Will be interesting to see if it can break out to the mainstream.

Do you think it has both staying power and broad appeal?

I just got back from a day-trip to SF and gained WAY more points that day 'cause I was “on the move” in an urban area, with small amounts of “waiting” time built into my sched.