I buy all kinds of stuff there. TP, paper towels, OTC medicine, books, DVDs, camping gear, dog food, stuff for my car, beer, jerky, laundry detergent, salmon, salsa, garbage bags, tissues, shampoo, egg substitute, sandwich baggies, etc.
I also do my photo processing (both film and digital) and get my prescriptions filled at Costco.
Once in a while I'll buy random stuff like a space heater or bar stools there as well.
Lately, I've been buying more produce (like fruit, broccoli, Romaine, Portabella mushrooms, etc.) because it's so cheap. I also have a Costco AmEx and I get very good rates on my car insurance through Costco.
Costco doesn't always offer the BEST deal in town on specific items but they always offer a GOOD deal on quality products and their return policy is awesome. They have good customer service, I took in some broken glasses that I didn't even buy there and they fixed them for free.