There are any number of reasons why toy camera photography can have such an enduring appeal. Some of them have already been listed here (nice comments, Jim Chinn!), but probably the best source would be Michelle Bates' excellent new book "Plastic Cameras: Toying With Creativity". There are images in there that you would never believe came out of a $22 camera.
Fairly recently, I did some publicity photos for some friends of mine who are an electronic music duo. We shot in digital, 35mm color film, 35mm cross-processed, and B&W Holga. They saw some useable stuff in the digital, liked the film, were intrigued by the cross-processed...and went absolutely bonkers over the Holga material. In fact, two of those images are what they chose to use in their newest promotional piece.
For me, it's the Holga's ability to produce detached(?), dream-like imagery that fascinates me. The fact that it's not razor sharp and spot-on is what separates it from everything else, and prevents its images from looking so rote and pedestrian. I remember one shot I took a couple of years ago of a guy lying on the beach in Malibu that I ended up cross-processing (it was Provia 400 120)...with a 35mm or a digital, it would have looked like a tourist-board shot. With the Holga, the soft focus and light leaks made it look like a surreal, almost post-nuclear artifact. (That's my opinion, anyway) True, toy cameras are not for every photographic situation, but when they're used in the right place at the right time, they can go over like gangbusters.