The grenade launcher is one of my favorite weapons. It's wonderfully effective against most enemies and shoots incredibly quickly and precisely. Note that grenades hit where your targeting reticle is, so you can adjust the distance you shoot that way.
It's particularly useful against:
- Large groups of drones, parasites, or those harvester spawn things, since it takes out all of them in a single hit.
- Rangers, because you can easily reach them, even on ledges
- Harvesters, because spamming grenades will easily kill the spawn it releases on death.
- Mortarbugs, because the grenade launcher deals massive amounts of damage in a very short time
- Eggs, because you can quickly saturate a whole room with grenades.
- Doors, like BlueRaja mentions. The chainsaw is a lot more efficient though.
It does have a few disadvantages, but none crippling:
- It doesn't hold a lot of ammo. Just take an ammo kit as your secondary, and you'll be fine. Ammo kits replenish a very large amount of grenades.
- It does a lot of friendly fire damage. Don't fire near teammates. Staying in front helps.
- It does a lot of self damage if you shoot too close. Run behind your teammates if enemies get too close. Taking a strong melee character like Vegas can help tackle small numbers of drones.
It's an awesome weapon.