Benefits of Storytelling:
Today so many of us (me included) rely on picture books and forget that we can tell stories with words alone. Storytelling encourages more active imagination than picture books and can also encourage more interaction between storyteller and audience. It is an excellent way to help your child develop language skills.(By no means, however, am I discouraging reading!!) You can find a good description of storytelling here.
If you are like me and prefer taking your child to live theatre and puppet shows rather than movies you can use storytelling to acquaint your child with the story before attending the theatre. The familiarity of the story means your child will enjoy the experience all the more. It is an adult misperception that we shouldn't "spoil the ending" before we see a show. (After all, we still watch Romeo and Juliet, although there is no question of how it ends.) I did this with Kiddo for Cinderella, The Frog Prince and Little Red Riding Hood.
Storytelling as Housekeeping Aid:
On a practical level -- which is why I am writing this post in the first place -- storytelling can be a great way to get things done. Sometimes I just want to wash the dishes or fold the laundry without "help" and so I tell Kiddo a story. He loves the different voices for each character, silly sound effects and joins in much more than when we are reading. And don't feel you have to make up a story yourself. I never do. I always just tell fairy tales.
Image found via The Graphics Fairy.