IS Certainly makes possible some hand held images that I could not get without it.
This image was with my 7D and 17-55mm EF-s at 1/4 sec. I had just received the camera, and for some unknown reason I had the ISO set to 800, which pushed the aperture way high (f22), so there is a lot of diffraction, and there is just a bit of shake. Ultimately, I was disappointed at the 7D noise, even at ISO 800. I re-edited the raw file this morning in Lightroom 3, and it does a much better job of processing the image and removing noise, but its still quite visible at 1:1.
On a dark dreary morning, I looked out my back window, and saw our baby goats playing king of the mountain on our horse. I knew the horse loves goats, but he would not submit for long, so I grabbed my 1D MK III which always has my 100-400mm on it and snapped a shot at 400mm thru the doublepane glass. I did not stop to setup the camera, so I got the settings as they were, and a 1/25 sec exposure at 400mm. I was lucky to get the photo at all, the horse rolled seconds later.
Even though the image is not particularly sharp due to shake, my wife likes to show it to her friends.
Without IS, I would not have had time to setup a tripod, or adjust ISO even higher (already at 800).