Problem: Everyone watches different pages for different reasons – some are noticeboards, some are projects to do, and some are watched for vandalism or sockpuppetry, however people with large watchlists can often forget why they watch a page. To use myself as an example, I primarily work countering spam, and many recurring sockmasters edit a large number of pages (which I watch), making it difficult to remember why I have a certain page watched, and for which sockmaster.
Proposed solution: Create a method of allowing the user to create and name watchlist groups (very similar to how filters can be created at Special:RecentChanges.) When a page is watched, there could be an option to add it to a watchlist group, similar to how you can select the duration of time to watch a page. Ideally, the user should also be able to filter their watchlist by group, and possibly assign different groups colors.
Who would benefit: Most Wikimedia users, especially anyone with a large watchlist.
More comments: I'm not massively familiar with MediaWiki, but I imagine it would involve re-purposing a lot of code from RecentChanges, especially bits surrounding the filter mechanisms.