I can't think of a single project where I haven't extended jQuery in some way. Whether it's to create my own widgets, calculate values, keep track of state, or a whole plethora of other things. Being able to build upon core jQuery, rather than rolling your own every time, makes for much more compact and error-free code.
And, of course, I use a lot of other people's plugins in my code as well. Last evening, in fact, I found and added a "time picker" plugin to my project.
The extent of the plugin community shows that there are lots of reasons to extend jQuery. When you create a plugin you can encapsulate a piece of functionality in a way that is easily reusable. You gain the benefits of consistency of appearance and behaviour across your entire Web site, and reduced maintenance as there is only a single piece of code to test.