Gardens Ablaze gives a very nice summary of the many health benefits of the common dandelion:
The humble little Dandelion has remarkable nutritional value, being very high in vitamins A and C, with more beta carotine than carrots and more potassium than broccoli or spinach, not to mention healthy doses of iron and copper for good measure. Medicinally, Dandelions are considered very safe and effective as a general tonic that helps strengthen the liver, gallbladder, pancreas, spleen, stomach, and intestines, improving bile flow and reducing inflammation in cases of hepatitis and cirrhosis. Dandelions also help to dissipate gallstones and are believed to improve kidney function, thereby improving overall health and clearing skin problems.
Dandelion tea is the perfect choice for those with the above problems or those who lead relatively sedentary lifestyles and who experience discomfort associated with this, such as constipation, digestive disorders, indigestion, and general sluggishness and fatigue. Just one cup per day will yield noticeable results within the first few months. Tea may also be of benefit for many of the problems associated with diabetes and low blood sugar.
Externally, the white sap from the stems or roots can be applied directly to ease the pain of sores and bee stings, and is useful in the elimination of warts, acne, and calluses.
Dandelion coffee is made by grinding roasted roots, and makes a nice substitute for regular coffee, but without the caffeine (see main Dandelionpage for instructions). People who can't tolerate much coffee can drink as much as they please and reap the health benefits without any side-effects. For the sweets lover, ground root mixed with warm milk and a little sweetener makes a very tasty and nutritious creamy beverage with few calories.
Although dandelion is generally considered safe, like any food/herb it may cause reactions in some individuals. The University of Maryland Medical Center offers a more detailed explanation of medicinal uses of dandelion, along with potential drug interactions.