Useit's Jakob Nielsen reminds us breadcrumb navigation is becoming increasingly popular and useful.
Despite the merely mid-sized benefits, the overall cost-benefit analysis comes out quite strongly in favor of breadcrumbs. Their downside is incredibly small: while they do take up space, that space is minute... Breadcrumbs are different than most other little-used design elements for the simple reason that they don't hurt users who ignore them.
Our usability data clearly agree.
Jakob points out that history crumbs (bread crumbs in the Hansel and Gretel sense, a running ordered history of all clicks) can confuse users. We'd agree with this point of view for online retailers seeking minimum confusion to win maximum sales. On our own internal intranet, however, history crumbs have proven successful, letting our team navigate our internal apps more quickly.
Bottom line? We'd recommend all online retailers implement traditional breadcrumbs.