I've also been thinking about this a lot lately. I hear about a lot of studies in my classes where important findings have been made about the function of different areas of the human brain through non-human primate studies by either the single-cell recordings that Chris mentioned, or by actually cutting out parts of the brain to see how primates function under certain conditions without these parts.
Hearing about these studies really makes me feel sick to my stomach. But in many cases, we have made large advances in our understanding of the brain through these studies. I don't know how to weigh up the costs and benefits though - should we be torturing other animals to understand more about ourselves? Where do we draw the line?
Something else I read in Discover magazine recently, was about how many mice that are used in research are kept in deprived environments, and that many findings drawn from these studies (to do with cancer, dementia etc) may be invalid. A researcher kept little video cameras inside the mouse boxes at night to observe their behaviour. He found that a lot of mice actually exhibit psychotic behaviour - they show the types of behaviours that people with particular mental illnesses show, because they are getting no stimulation at all in their environment.This behaviour was not observed in mice that had a normal or enriched environment. So not only are we torturing these mice by not giving them reasonable living environents, but the end result is worthless. Very scary stuff.
On perhaps a brigher note, at least in terms of primate studies, we are getting more advanced at developing sensitive neuroimaging technology that are non-invasive (like fMRI and EEG/ERP etc). So hopefully we will get to the stage in the very near future where we can measure brain functioning in animals as precisely as we are now using invasive measures, without any need to harm them at all.
Nicole