While designing a systems, I often came across the moot point of choosing btw a heirarchical database and a relational flat table database. There are some domain problems, where heirarchical databases such as LDAP and MS Directory Services make sense over RDBs.
The hierarchical database model existed before the far more familiar relational model in early mainframe days. Hierarchical databases were blown away by relational versions because it was difficult to model a many-to-many relationship - the very basis of the hierarchical model is that each child element has only one parent element.
In his article, Scott Ambler makes the following statement:
Hierarchical databases fell out of favor with the advent of relational databases due to their lack of flexibility because it wouldn’t easily support data access outside the original design of the data
structure. For example, in the customer-order schema you could only access an order through a customer, you couldn’t easily find all the orders that included the sale of a widget because the schema isn’t designed to all that.
I found an article on the microsoft site which discusses the areas where directory services can be used in place of Relational databases.
Some good candidates for heirarchical databases are- White pages" information, User credential & security group information, Network configuration and service policies, Application deployment policies etc.