I vote to keep the function. I participate regularly in a couple boards that don't have this function and it's even more confusing. I also participate in one that doesn't even have a convenient quote function, talk about painful!

Anyway, 99% of the time I use the reply button that is within the box of an individual post. This ensures that the reply to field in my post has the correct person (note what it says in this post). I also frequently include some or all of the person's post if I feel doing so will make the context of my comment more clear. Examples of this would extracting a small portion of the post, such as a question, or quoting a specific post when the person I am responding to recently made more than one post. This certainly is more work than just hitting the add reply button at the top or bottom of the thread, but I think it helps put my replies in context.