You are efficient at arranging your inventory in general. This makes it much easier to carry that little extra you've always needed. This is useful for characters with low Strength, i.e. sharpshooters and mediators.
Its usefulness is reduced in Fallout 2 with the addition of larger teams of traveling companions and the Highwayman's trunk.
Fallout: New Vegashardcore mode applies weight to ammunition, which could cause this perk to be especially useful, allowing you to carry twice as much ammunition at the same weight. Note that with this perk, all affected items in the game world will display their new, lower weight whether or not they are in your inventory. (This does not change companion carrying capacity—they still carry these items at full weight.)
The two-pound threshold applies before stacking, not after; even though a stack of 30 one-pound Sunset Sarsaparillas weighs 30 pounds, the perk still applies.
Synergizes well with the perks Strong Back, Long HaulFallout: New Vegas, HoarderOld World Blues (add-on), and Burden to BearLonesome Road (add-on). It also works well with Travel LightFallout: New Vegas, which despite its name, increases movement speed even when over-encumbered.
Likely most players will consider this perk essential in hardcore mode as ammunition now has weight and food and water items need to be carried to stave off dehydration and starvation.
This perk affects more than it leads on, affecting weapons, aid and misc. items all the same. this makes it more useful to players who like to use throwing weapons, or mines, as most of them are 1 unit or less, and will now be even lighter.
There appears to be a bug related to Pack Rat in that due to the discrepancy between a follower's weight and the Courier's weight. The Courier is capable of adding an unlimited amount of ammunition onto their companion's inventory despite the fact that it will exceed the companion's max weight. IE: 30000 rounds of 5mm ammunition can be added if the companion starts out with room to carry an extra round, and the courier deposits the rounds in small amounts, IE: 1-750-ish rounds at a time.
This can be useful outside of hardcore mode, for players who like to craft lots of items and for players who like to carry a lot of food with them.