Kernel mode-setting (KMS) is useful for faster VT/X switching, VTs being always at the panel's native resolution, the ability to thwart some security bugs in the X.Org Server (as shown earlier this week), presenting a cleaner and more flexible architecture, and allowing new and interesting projects to emerge (such as Plymouth and Wayland), but the benefits do not end there. When kernel mode-setting is combined with KDB, a Linux kernel debugger shell, you now have one powerful combination.
What this allows you to do is when your system goes awry, rather than being stuck to hard reset the system if you were using user-space mode-setting, with KDB+KMS you can now fall-back to this debugging shell to be able to diagnose the problem and collect other information used for debugging whether it was a kernel panic, hardware trap, or other problem.
Intel's Jesse Barnes recently outlined the steps required right now (of course, with time it should be easier and simpler) to get KDB working with Intel KMS. Chris Ball with the One Laptop Per Child project has now taken the steps necessary to support the kernel debugging shell with kernel mode-setting for ATI Radeon and Nouveau (NVIDIA) hardware.
For now there are patches that need to be applied against the Radeon and Nouveau DRM code to implement the KDB debug hooks within the kernel drivers, but after that code has been mainlined in the Linux kernel, the process should be easier. The directions for setting up the kernel debugger shell with kernel mode-setting can be found in this blog post. Below is an older video demonstrating KDB/KGDB with kernel mode-setting on Linux.