Yes, believe it or not, that small program has been one of the most useful applications I've ever used. I will tell you about the latest situations I used NetKitty (version 1.7-RSO :), and how it helped.
During the testing of an application, one of the test cases was related to networking performance. However, we didn't have any extra machine available with suitable features to run our system, so we had to run both (clients and server) in the same machine.
So, in order to take into account the use of the real network interface we put NetKitty in a remote machine. The good thing about NetKitty is that it doesn't need any special requirement. It is just 500 lines of standard UNIX code.
Then we launch it as a remote relay, accepting connections from the clients in one machine, and sending the data to the server in the same machine.
The CLI for that was something like this
nk -hub -client T,REMOTE_IP,SERVER_PORT -server T,SERVER_PORT
That single command did the trick, but we'd got an extra feature. The applications we were testing used a text based protocol for their communication, so we could monitor all the messages they interchanged... :)
Yep, to make the whole thing transparent to the client we set up a virtual network interface. Something like
ifconfig eth0:1 new_ip netmask new_netmask
Another NetKitty successful achievement!