Hi all, I have been re-reading this topic with interest - I actually thought I had replied before, but perhaps I held back, feeling shy after so much anti-organic mulch debate (we use mostly composted or shredded garden waste).
For what it is worth, my experience agrees broadly with Fleur's comments about gravel vs. organic mulches. We are fortunate here to have a large area and lots of vegetable mass to play with (some parts are irrigated and growing in the summer and we still have lawns, much though I would like to dispense with those). The more woody material gets shredded before going on the compost heap, while lighter weeds, hay and grass clippings going straight there. The material does not always have a chance to break down very thoroughly, partly because we don't water the heap as often as we should, but it gets there in the end, and even if it is semi-green when it goes on the soil it does not seem to do any harm.
One exception is oleander cuttings - I have heard it said that these can poison the soil, but I could not tell you that they have definitely had an effect on plants in the garden here, where they have always been mixed in with large quantities of other material. I would be interested to know others' views and experience of this, or other plants to avoid putting back into the ground.
When I can get it, I bung a good load of manure on – but this is in the exotic garden; we try not to alter the natural soil conditions in the native plant zones, tough though they may be for young establishing plants. It is worth reiterating I keep all mulches away from the collar of the plants, be they sub-tropics or mediterraneans; but as Fleur has mentioned, nothing really stays wet for long enough to pose a problem.
In terms of benefits, I would highlight improving soil texture, supressing weeds and making them easier to pull out in future, and moisture retention. We have somewhat varied soil, in places very compacted, others extremely sandy, others almost pure clay, and the mulch helps in all of these situations.
One perspective that goes slightly against the gravel/garrigue argument is that an organic mulch imitates nature - fallen leaves are caught at the twiggy base of a plant in the wild, whereupon they do all the good stuff an organic mulch should.
I have also used gravel around culinary herbs and the like, and of course it has its benefits too, especially in pots, where a free-draining surface is useful. The other application where I would really recommend gravel/mineral mulch over organic is cacti and succulents - I have seen these improve literally overnight with the addition of a couple of inches of free-draining top dressing.
Hope that helps and please keep adding your views, it really is interesting and useful to compare notes.