It can certainly make things simpler, from code I wrote yesterday:
var content = new Queue>>();
...
foreach (var entry in content) { ... }
This would have be extremely verbose without var.
Addendum: A little time spent with a language with real type inference (e.g. F#) will show just how good compilers are at getting the type of expressions right. It certainly has meant I tend to use var as much as I can, and using an explicit type now indicates that the variable is not of the initialising expression's type.
