I recently figured that these substantially increase your password security - with what you know and what you have. They are very easy integrated into PAM - and the good news is most services on Linux can be configured to use PAM as an authentication source.
SSH, Dovecot, Apache... no problems.
The good thing is, these tokens are not expensive at all - 25 USD and they are yours or for 10 USD more you can even get one with RFID integrated. What more do you want?
Unfortunately still, there are only a few websites what are supporting these tokens, there are certainly plugins for some web applications like WordPress or SqurirrelMail. These are what I know of, there a certainly more.
I wrote a short article about these nearly 2 years ago - you can find it here.