Hi Roz,
I qualified as a PRINCE2 Practitioner 5 years ago (currently studying the MSP now) and to echo shzl400, its really scalable. I've used a kinda PRINCE2-lite methodology for smaller, simpler projects, whereas for Pan-London IT projects we've used the whole shebang.
Coz its the public sector standard methodology, its useful to do, if only so you understand the terminology and everyone has a standard approach.
I've found that like any methodology, its only as good as the implemention of it. I work in a Programme Management Office made up of dedicated project staff and as we all understand PRINCE2 inside out and use it on a daily basis its a genuinely useful, in fact essential, tool for us. However, I've also sat in on 'projects' where the terminology was used, but with no real application and in those cases, it was used more to confuse other people than actually add any value.