The company that I work for, is developing a lot of RESTful services.
However none of them expose public APIs.(In the sense that all services are internally consumed by our own clients). The reason why we went for REST architectural style was that we wanted our services to be easily consumable and more importantly scale well.
From my own practical experience I have come to the conclusion that HTTP + ATOM syndication format is a good idea, provided you want to keep things flexible(In terms of different content model, attaching and extending meta data associated with payloads, uniform parsing etc). ATOM ensures that everybody interprets the payload in an uniform manner without any scope for ambiguity.
However if one does not have any such complex requirements or does not forsee such requirements then the ATOM format could be a bit of an overhead. (For instance elements like Author,Title etc make sense more in the blogging/RSS world and may not make sense in your particular problem domain).
Also if the goal is to just serialize data structures at one end and reconstruct it at the other end, then most web frameworks(like WCF) have custom formats which are more appealing.
So in my opinion ATOM Pub is good if you need flexiblity in terms of data representation and if the playing field is huge with different kind of client.
However if you have a good knowledge of potential clients and server/client usage patterns then custom formats might be a good idea.
If the client is browser based then formats like JSON are very appealing.
Hope this answers your question.