One of my jedi masters, Darren Neimke, posted the following about having personal projects:

"One of the questions that I always ask is for the applicant to tell me about their favorite personal project that they have going right now. It's a bit of a loaded question I suppose because of how it assumes that they do have a personal project - but that's almost my point. Having a personal project (or more than one) is a trait that is shared by every developer that I respect and so I rate it rather highly."
Interesting, because my latest "personal" project is a tool I called Palantir which let's the developers browse around the database getting schema information much more quickly and effeciently than writing queries like:

select * from information_schema.columns where table_name = 'foo'
select * from information_schema.columns where column_name like '%foo%'
It pleasures me to no end when I walk through our work area and see it running on everyone's machines. Usually in the evening I add features that are in response to feedback and what I think will make it more effective of a tool. For example, one screen, devoted to exposing stored procedures, displayed TSQL without syntax highlighting and it became a request. That evening I spent some time with regular expressions and search/replace to get a "pretty" version of procedure definitions into the software.

Invariably the question of why I wrote Palantir comes up, and my response usually a bit of surprise; I thought everyone had little pet projects of software they worked on at home. In fact, most don't. In fact, as I ask around, I find that I'm quite unique in that environment for working on my own stuff at home.

I don't think it necessarily defines me as a better programmer but I know that it's when I write my own stuff that I get that free reign to improve my skills instead of working against a spec and a deadline. My projects give me a chance to do things with regular expressions, backreferences, web services, RSS, XML, and a ton of other things that don't come up in the regular work day.

I'm still considering what to do with Palantir; I want to keep it personal for now so that I can work in some more features and leave it with my personal vision at its core. Then I may work up the courage to put it up on CodePlex or SourceForge.