I actually use the quote quite regularly, mainly to show what I'm replying to. For example, if a user asked a question 5 posts up, I would quote that user's question in my reply to show that I'm responding to this query.
Of course there are also users who don't know how to quote properly, i.e. they quote the entire last post, especially if they are the first to reply to a thread in which case it's obvious they are responding to the first post.
In my opinion, the quote buttons are well presented on this forum, i.e. the main "Reply" button stands clearly out. I've seen other forums which quote by default, which is a pain as most users don't delete the unwanted quoted text. This leads to massive posts in long threads where for example, post #2 has post #1 quoted, post #3 has post #2 quoted including the quote from #1 and so on.
One thing that is missing is the ability to link to link to a single-post (see this discussion), as this would eliminate the need to quote an entire post, e.g. just insert a single-post link in your reply and when someone clicks the link to read it, the linked post shows up on its own in a pop-up window.