The Blog of Long Now links to an interactive map from UCLA designed to elucidate Berlin's history using old maps. This type of application of GIS demonstrates just how powerful and dynamic a tool it can be. The difficult problem is digitizing historical maps and information into a GIS format.
As I've mentioned, in Ottawa County, we recently scanned thousands of historical aerial photos at a high resolution. Each mylar sheet is equal to a section or quarter-section and they have been scanned into TIFFs (about 40 mb in size each). While each TIFF will have use as an individual file viewed using a standard photo program, it is unlikely that we will be able to dedicate time to "georeferencing" the photos (assigning a geographic location to each TIFF) or "mosiacing" them (stitching the TIFFs together into a seamless single photo) so that they could be used for viewing and analysis in a true GIS program. We only have so much time.
Fortunately, institutions such as UCLA do have the time (as well as organizations such as Dave Rumsey's). Through their efforts, we now have new and fascinating ways of interpretating the past.