Skills "What does your character do for enjoyment when not adventuring?" The answers to those questions become skills at which the PC is trained. We figure out an applicable ability modifier and we now have a skill bonus to that skill. Voila.
Now if I have an occassion where that PC's ability at Blacksmithing or Lute Playing or Woodcarving or Origami comes into play, I've already got a number to use. It also gives me a guide for things that the PC is interested in to mold plothooks around as well as a tool for introducing plot elements in a way that relate specifically to that PC. So I can, for example, have the PC with the Blacksmithing skill roll to notice that the weapon of the Hobgoblin Lieutenant bears a forge-mark from a neighboring kingdom. Was the weapon stolen or are the Hobgoblins being funded by an enemy nation?! That sort of thing.
Anyway, it costs the PC nothing and the player can invest as much or as little roleplaying in these skills as they like. It's pure bonus.