The Roth conversion generally makes sense if the tax rate on the conversion is less than, the same as, or not too much higher than the tax rate that you or your beneficiaries would otherwise pay when you or they would otherwise take distributions.
This can be illustrated by a simple example, assuming a constant 30% tax bracket. You have a $100 traditional IRA and $30 of other money. You convert and use the $30 of other money to pay the tax. You now have a $100 Roth IRA. Over some period of time, it grows to $200, which you or your beneficiaries withdraw tax-free. Your twin brother has a $100 traditional IRA and $30 of other money, but does not convert. Over the same period of time, his $100 traditional IRA grows to $200. He or his beneficairies withdraw the $200, pay $60 of income tax, and have $140 left. However, his $30 taxable account will grow to something less than $60, since he has to pay tax on the income and gains each year.
Other benefits of the Roth conversion include no required distributions at 70 1/2 (this is a significant benefit), avoiding the double tax problem with respect to state estate taxes that Bob's not my name referred to (discussed below), a Roth is a more valuable asset to fund a credit shelter or GST exempt disposition, and a Roth avoids the compressed income tax brackets for trusts (discussed below).
There is an income tax deduction for the estate tax on IRAs, at the marginal rate. This puts you in about the same position as if you had paid the income tax first and then paid estate tax on the amount remaining after income tax. However, the deduction is only available for the Federal estate tax, not the state estate tax. This is relevant in states that have a state estate tax. (If Congress does nothing, the state death tax will be a credit rather than a deduction once again beginning in 2013, so the state estate tax will return in every state.)
We have our clients provide for their children in trust rather than outright, to keep the inheritance out of the children's estates, and to protect against the children's creditors, including spouses. The same reasons for leaving other assets in trust apply to IRAs. However, trusts reach the top income tax bracket quickly (35% on taxable income over $11,650 in 2012). There's often a tradeoff between distributing income (taxed to the beneficiaries, often at a lower rate, but this gives up the creditor protection and throws the money into the beneficiaries' estates) and retaining the income (preserves creditor protection and estate tax sheltering, but often taxed at a higher rate). A Roth IRA avoids the tradeoff.
While each case is different, many people do what was suggested here, namely converting each year the amount they can convert while staying in a particular tax bracket.