I'm a big fan of WS gaming because you get a better field of view. Although you can play on a 4:3 or 5:4 screen with a zoomed out FOV, it does not emulate the playing experience like gaming in widescreen does.
Widescreen gaming (eg 16:9 on consoles, or 16:10 on most widescreen monitors) come closer to the actual human field of vision, or rather where we can focus on. Although we can 'see' up and down quite a bit, our actual focus is something like 10 degrees up and down, while the horizontal view focus is wider.
It's tough to explain because a.) I can't give a truly accurate scientific explanation, and b.) it's different and subjective for every person, however if you're at all interested in Widescreen gaming, here's a good primer:
if you've got Half Life 2, this is a piece of cake. Play the game in its normal 4:3 or 5:4 resolution on your screen (eg 1280X1024 for a 17" to 19" LCD). Then, go into the settings and change the resolution to 1280X760. You might have to slide the screen closer because this will obviously yield a much smaller screen. Play with the game at this setting for a little while and see how the increased field of vision gives you a wider view on everything, and gives you a much more 'open' feeling of playing the game. Switch back and forth at several scenic places to really appreciate the difference --- taking some screenshots and examining them in Windows can help. Do not worry about the fact that the widescreen image is smaller -getting a nice 20" widescreen display (or bigger 😀) will completely fix that 😉.
Now, if you really are convinced about the Widescreen difference, go out and buy a widescreen display.
In terms of movies, it's a no brainer. About 50% of today's movies are done in a 1.77-1.85:1 ratio, and anamorphically stored and compressed to fit a 16:9 widescreen TV (1.77:1) . These look significantly better on a widescreen display because they fill the entire (or almost the entire) screen.
For the other 50% of movies, they are in a 2.35-2.40:1 aspect ratio. These obviously don't fill a full 16:9 or 16:10 screen, but nonetheless do still look better than on a 4:3 screen, since they give you more viewing area.
So, to go back to your original point: widescreen will improve your entertainment experience tremendously (oh, btw, next gen consoles all support widescreen/HDTV out of the box, so hook up that Xbox360 to your 2005fpw and be happy (that is unless you've got an even better widescreen HDTV 😉 ). Widescreen isn't going to make your workspace a hell of a lot more productive, although there is suprisingly enough extra room for toolbars (eg photoshop), small menus (eg MSN) and other little pop-up screens. It won't really hurt your workspace, either, except that you might be lusting for some more widescreen gaming from time to time 😉 .
Best of luck!