I recently made use of the two types of N:N relationships available in CRM 4.0:
I created a custom entity to represent network events that I attend at which I meet new or known contacts. I want to track which events I attend and when, as well as the people I have the opportunity to spend some time with during the event. For this I used the native N:N relationship. I just created the custom entity and then created a new N:N relationship with the contact record.
Here's my simple custom entity. The contacts list is represented in the details section as "attendees".
Here is a view of the Network Event from the Contact's perspective. If I had met with this contact at several network events, they would all be listed.
Here are the details of the N:N relationship that was created by CRM:
I also created two custom entities to track which ISV products our clients own. I set up a manual N:N relationship for this because I wanted to not only identify which ISV products a client has, but also some specific information about the product registration, e.g. user count, renewal date, etc.
Here is a diagram of the custom entities and the relationships:
Here is an example of the ISV Product Registration that has specific information about the client's registered products:
The product is Mekorma MICR, and the client is A.L. Wizard. There is specific information about the client's registration of this product.
This allows me to easily track ISV product registrations and create workflows and views that help manage this part of our business.