I remember having butler service at the Regent in Hong Kong back in 1990. In that case, two young gentlemen thoroughly looked after me throughout my stay. They brought tea and refreshments when I arrived, took care of cleaning the room, and were generally available for anything I wanted. As a young man at the time, I was low maintenance. But they gave the impression that at least one of them was always "on call" and would be at the door within minutes when summoned. I'm not sure when this service was discontinued. 'Course the room rates back then were double (in 1990 dollars) what they are today (in 2006 dollars).
At the Peninsula in Hong Kong, where I stay now, they have valets available whenever you press the call button in your room. They bring ice, ice buckets and glassware; they take care of pressing, shoe shine, that sort of thing. I don't think the hotel advertises it as butler service, but it certainly feels a bit like butler service. Or maybe I'm still low maintenance.

Nah.
The one experience I've had with "butler service" that REALLY felt like butler service was at The Chedi Club at Tanah Gajah near Ubud, Bali. Two young fellows met us at the entrance to the property when we arrived, introduced themselves, shepherded us through check-in formalities, and brought us on a tour of the property while on the way to our villa. When we asked for something for the minibar, they anticipated our tastes by clearing out stuff we didn't want and fully stocking it with what we did. Before departing for the evening, they made sure we didn't need anything further. They were there in the morning to escort us to breakfast. It was almost too attentive. When we came back from touring, they served us afternoon tea. When we went out for dinner one night, Mr. Megatop secretly told them it was my birthday and asked that they do something special. When we returned, they had made a trail of frangiapanni and rose petals leading into our villa, and left us a bottle of sparkling wine, a chocolate mousse cake, a floral arrangement complete with "Happy Birthday Mr. MegatopLover, from [their names]" written on a banana leaf. To top it off, they had drawn a rose petal and fangiapanni bath for us with tea-light candles all around. That was spectacular. Anyway, they also took care of laundry and, when we departed for the Chedi's sister hotel on the beach, they made sure our departure went smoothly. All this at no extra cost at all, not even the arrangements they made on my birthday. They were perhaps they most memorable aspect of our stay at this hotel and absolutely a reason to return. Oh, and one of them was just gorgeous.
My experience is somewhat limited, but I imagine you'll find elaborate butler service along these lines more often at resort properties than city hotels, and more often in certain parts of the world than in others.