Why is Bazaar of Baghdad supposedly such a good card?
While all of these answers get at some measure of Bazaar's popularity, I should note (as Ian does somewhat in passing) that virtually all of Bazaar's value at this point comes from it being the key card in the Vintage Dredge deck; Madness and Flashback are both effectively moot, but in Vintage Dredge is an immensely powerful strategy.  Note that in the Dredge decks, Bazaar is all upside; drawing 2 cards means you have two opportunities to dredge, and the discard 3 puts cards in your graveyard where you want them - Dredge would rather not have cards in its hand!  See, for instance, the first decklist at http://www.starcitygames.com/magic/vintage/22161_New_Phyrexia_In_Vintage_Dredge.html - this is a pretty good example of Bazaar at its most powerful.