Using cookies is the most accurate method of counting unique visitors to your site. IP Address counting is not reliable. Visitors from the same proxy server are likely to have the same IP Address. With cookies you get the most accurate count. Using cookies is also the most accurate means of calculating the average number of pages viewed by your visitors before they leave your site, what percentage are repeat visitors, and the average number of times a visitor comes back to your site.
Cookies can store visitor preferences.
This is a method used by portal page sites so their visitors can customize their portal page. If you have more than one site, you can track visitors going from site to site. You do this by displaying an image on all pages of each of your sites, an image that is retrieved from one common domain via CGI or other method that sets and retrieves cookies and also maintains auxiliary databases on its server. The image can be a banner, a 1x1 pixel GIF, or any other image. Many banner dispensing domains use cookies this way.