It is a cool tool but of limited use. These days hard drive space is not that big of deal and content is usually going to be a lot bigger than the executable. Also most people use an installer to distribute apps, and installer already provides compression. Really the only time I would use UPX was if I was going to distribute a completely stand alone executable (as in no readme, no nothing) because if you have more than one file you can 7zip it and the need for UPX is gone. It is also important to note that UPX does not change the size of executable loaded into memory or the one on disk.
EDIT: Should read "only the one on disk". Which could be usefull if you carry lots of programs around on a flash drive or something similar.