Bio Break had a great post a while back: Six ways that MMOs can get me to spend money on them. Being the shameless copycat that I am, here are some things I will happily buy in an MMO, roughly in order of priority.
More Inventory Space. Shuffling my inventory slots around is not a fun gameplay element for me, so buying inventory and/or bank slots is usually one of the first things I buy. This is probably where I spend a good 75% of my money in free-to-play games.
Faster Movement. The time that you spend running from point A to point B in an MMO is mostly wasted, so faster mounts and/or travel is also one of the first things I buy. For example, I will spend almost limitless amounts of money on the fast-travel buttons in LOTRO that teleport you back to quest givers. Running back to turn in quests is one of my least favorite parts of any MMO.
Character Slots. If there is a limit on character slots, and it’s a game that I like, I will usually end up buying more character slots to try out different alts. (Especially if the only way to “expand” one’s inventory is to mail gear to alts.) I’ve bought many character slots in GW2 so that I could have one character of each class.
Endgame Gear for Alts. If there isn’t any “new” path for an alt to get endgame gear, and I’ve already done the old path and/or it no longer interests me, I will happily pay to skip over it. When I say “endgame gear” I don’t mean “the best gear in the game,” I just mean “gear that lets you play in the endgame.” There is usually a gap between the time that you reach the maximum level and the time that you can fully participate in endgame content. For example, a “fresh” level 60 in Rift can’t just walk into Expert Dungeons (well, maybe you can, but you won’t be helping much). You have to spend some time replacing your level 59 gear with level 60 gear first. That’s the part I often want to skip. (Rift has starter level 60 gear sets in their cash shop which is perfect for this.)
Things I don’t buy:
Cosmetics. I almost never buy cosmetic items unless I have an excess of cash shop credits and don’t know what else to spend them on. This usually only happens when I have a subscription to a game and they give you a stipend of credits every month.
Gear Upgrades. The only time I ever consider buying gear is if the regular gear drops aren’t sufficient. Of course, at that point I feel like I’m being manipulated, so I probably wouldn’t even be playing that game. I can’t even think of any examples where I’ve bought upgraded gear to defeat a challenge in the normal course of a game.