One of the best uses for markup extensions is for easier usage of IValueConverter. In the sample below BoolToVisibilityConverter is a value converter but since it's instance independent it can be used without the normal hasles of a value converter with the help of markup extension. In XAML just use

Visibility="{Binding [BoolProperty], Converter={[xmlns]:BoolToVisibilityConverter}}"

and you can set item visibility to bool value.

public class BoolToVisibilityConverter : MarkupExtension, IValueConverter
    {
        public object Convert(object value, Type targetType, object parameter, CultureInfo culture)
        {
            if (value is bool)
                return (bool)value ? Visibility.Visible : Visibility.Collapsed;
            else
                return Visibility.Collapsed;
        }

        public object ConvertBack(object value, Type targetType, object parameter, CultureInfo culture)
        {
            if (value is Visibility)
            {
                if ((Visibility)value == Visibility.Visible)
                    return true;
                else
                    return false;
            }
            else
                return false;
        }

        public override object ProvideValue(IServiceProvider serviceProvider)
        {
            return this;
        }
    }

There are four predefined markup extensions in XAML:

x:Type supplies the Type object for the named type. This facility is used most frequently in styles and templates.

<object property="{x:Type prefix:typeNameValue}" .../>

x:Static produces static values. The values come from value-type code entities that are not directly the type of a target property's value, but can be evaluated to that type.

<object property="{x:Static prefix:typeName.staticMemberName}" .../>

x:Null specifies null as a value for a property and can be used either for attributes or property element values.

<object property="{x:Null}" .../>

x:Array provides support for the creation of general arrays in XAML syntax, for cases where the collection support provided by WPF base elements and control models is deliberately not used.

<x:Array Type="typeName">
  arrayContents
</x:Array>