When your baby is a newborn, using a nursing cover is a great way to "break yourself in" to nursing in public. Most tiny babies don't object to having a piece of fabric tossed over their heads, and the stiff neckline of a nursing cover makes it easy for mom to see baby, and for baby to see mom.
When your baby is a bit older, a nursing cover can be used in order to minimize distractions and help baby focus on nursing when you're out and about in an exciting new environment. On the other hand, the cover itself might seem exciting and new to baby, and become its own distraction.
It is very much possible to learn to nurse discreetly without a cover. In fact, a nursing cover is essentially a giant billboard shouting "I AM BREASTFEEDING RIGHT NOW!!!", which isn't really very discreet. I'm half inclined to object to the use of nursing covers AT ALL because of this paradox. Ultimately, though, whatever makes YOU feel comfortable nursing in public is what you should be doing or using. Note that I said whatever makes YOU, the nursing mom, comfortable. This may or may not be the same thing that makes others comfortable. They'll live.
In my personal experience, the one instance in which I find my nursing cover to still be useful is while I'm nursing Rhys, especially nursing a tired Rhys, in his carrier. The cover isn't so much "over" his head in this position as it is "around" his head, which isn't as objectionable to him. It also gives the illusion that I'm walking around with a "sleeping" baby instead of with a "BREASTFEEDING!!!" baby.
I own two covers by Udder Covers which have served me well over these last ten months. Both were purchased using free cover discount codes. Use one of the following codes (sourced via a simple Google search) and you'll pay only $9.95 in "shipping and handling" for your cover (which is still a heck of a lot less than the $40+ covers go for in boutiques): onefree, family2010, babies, cousin2, parenthood (etc., etc. . . . the list goes on.)