I can find lots of stuff showing me what a lambda function is, and how the syntax works and what not.  But other than the "coolness factor" (I can make a function in middle a call to another function, neat!) I haven't seen something that's overwelmingly compelling to say why I really need/want to use them.
It seems to be more of a stylistic or structual choice in most examples I've seen.  And kinda breaks the "Only one correct way to do something" in python rule.  How does it make my programs, more correct, more reliable, faster, or easier to understand?  (Most coding standards I've seen tend to tell you to avoid overly complex statements on a single line.  If it makes it easier to read break it up.)
Lambdas allow you to create functions on the fly. Most of the examples I've seen don't do much more than create a function with parameters passed at the time of creation rather than execution. Or they simplify the code by not requiring a formal declaration of the function ahead of use.
A more interesting use would be to dynamically construct a python function to evaluate a mathematical expression that isn't known until run time (user input). Once created, that function can be called repeatedly with different arguments to evaluate the expression (say you wanted to plot it). That may even be a poor example given eval(). This type of use is where the "real" power is - in dynamically creating more complex code, rather than the simple examples you often see which are not much more than nice (source) code size reductions.
Why use lambda functions?