Sever - http://us.battle.net/d3/en/item/severKilling blows are displayed as massive critical strikes. Slain enemies can't be raised from the dead. The huge damage number is purely cosmetic; it doesn't actually increase your damage output and doesn't work with Area Damage or other splash damage effects.
needs further testing, whether it still functions like previously.
AFAIK the damage is not purely cosmetic.
Before 2.0 patch there was one skill that interacted with Severs final blow.
Demon Hunter skill Marked for Death: Grim Reaper states
15% of damage dealt to the marked enemy is also divided evenly among all enemies within 20 yards.
IF you (or any from your party) did the final Sever blow to GR Marked enemy, then this huge crit got actually accounted and 15% of the damage transferred as an AOE damage to all enemies. You could basically wipe out entire elite pack with it.
It's similar mechanic to Monks Exploding Palm, although Exp Palm is tied to monsters health, Sever has it's own peculiarities.
Back in the days of 1.0.8 and older there was actually very viable Demon Hunter Sword and Board build with Sever (and high MP scalable too, because of decent damage and great mitigation with the shield). There were skills that didn't require bows (grenades, spike traps, chakrams etc) that you could use in conjunction with Grim Reaper / Sever and you were trying to kill the marked ones for "splash" damage. I ran this build myself for some time (until i swithed to sns wizard...). Chasing and marking was pain (had to select lowest health or weaker enemy, mark it and kill it), but it worked allright.
here's the build video
i highly doubt that it's changed, so it might work like previously.