Good question. I don't have a 'Best practise' answer, but I'll jot down how I'm using Twitter Favourites (aka Favorites in 'merica).
When I started out, I thought of Twitter favourites as a quiet way of showing I liked a tweet. I didn't expect anyone to actually look at my favourites, just that some tiny bit of tweet karma would somehow flow to the original author. If I wanted to give a tweet more exposure to my massive list of followers (cough) I would retweet it.
Later I included them as a feed in my friendfeed stream, but still didn't consider them anything anyone would actually see. @TinyBuddha probably got most of my favourites.
Lately I've been using Tweetdeck on iPhone for most of my twitter reading. It's relatively quick and painless, except for following links to longer posts that don't have mobile themes enabled. My lowly 3G just can't render the pages fast enough to make it worthwhile.
To work around that slow painful experience I've effectively assumed I'm the only one that would ever look at my favourites and started using them as a quick "ReadItLater" bookmark to make sure I can find potentially interesting links when I get back to my laptop. I set up a column in Tweetdeck to pull in all my own favourites and click away when I have some reading time.
The fact that I haven't even looked at what I'm flagging as a favourite introduces some risks (e.g. RickRollingByProxy) if anyone actually is looking at my favourites, but for now I'm willing to take that chance.
Anyone know of a 'best practice' for Twitter favourites? Hopefully Darcy's tweet will garner some good responses.