Many players and GMs use props in their campaigns, and this is good, and bad. The real danger of props is two fold, first they begin to interfere with the flow of the game, and second they take time away from a busy GM or player because they have to be created in the first place. Do the advantages of having a tangible item out weigh the disadvantages?
Props, in many cases, will disrupt the game. I have found myself, as a player or GM, fumbling to find the right prop. This takes time, and as RPG players know, Father Time is the most powerful entity you can ever encounter. Props also distract players and GMs from the matter at hand.
A player may be examining a prop when he should be listening to another player or the GM. Many times I have experienced a player who was asked, "Who are you going to attack?", and the response was, "Wait, what's going on?" If he had been listening the party wouldn't have to explain the situation again.
Props, also, take a great deal of time to develop. In many instances the time would be better spent designing an adventure or reading the rule book or a supplement. Many campaigns I have seen or heard of have players complaining that they had to stop playing because the GM didn't have the adventure finished. In most cases this is because the GM was over dosing on props.
But, props add so much realism to a game. As you know a picture is worth a thousand words, but is a prop worth two thousand? I would have to agree. Nothing comes close to the feeling you get when you pick up a MkV pistol and blast an imaginary Yexil coming through the kitchen door.
The flavor of the game can be savored with props. They are also physical reminders of past games and adventures. In a game that's played in the mind, a physical reminder is a welcome one.
Props also help to solve problems that may arise. If a player thinks he can hide an artifact under his clothes and sneak past an android guard: let him try. Use the prop to see if it really is possible. You might be suprised at how many times you change your mind.
In conclusion, props are like anything else; they're good if used in moderation. Not too much time should be spent on them, but a little time is time very well spent.