My players have bought basic gear, healing potions (as well as spicy, healing radishes), poisons, and booze.
They've used it to enrich a clan of goblins they befriended, so that the goblins could improve their lot in life. Also they've hired a few sages and specialists, for information and other odd jobs.
I created a list of special items that run on magic but are based on pseudo-science that they could potentially purchase (running the gamut from 1,000 to 50,000 gp) but the players have yet to visit the place that sells them. There's a board that can surf on the mist that permeates the world, as well as a laser rifle, but surprisingly they don't seem especially interested.
Mostly I'd say its used to advance the plot and for RP. Since they can't buy magic items, players use it for things they want. They might give it to the poor in their hometown, buy a really foppish hat, or save for a castle or retirement. When they do these kinds of things, make it worth their while. Describe to them how their efforts have improved the lives of the formerly impoverished, or have NPCs regularly comment about the hat. Based on my players reactions, the best thing they've spent money on thus far was that clan of goblins.
