Please use Mode C when flying in Class G airspace if your aircraft has it.
An increasing number of GA aircraft, especially helicopters, have TCAS or TAS, which can pick up the response from transponding aircraft and plot it on a small screen, with relative altitude in hundreds of feet. Other transponding aircraft can be detected up to twenty miles away, giving a much longer time for the pilot to visually detect and avoid it. The prime method of avoidance is by arranging an altitude difference because the equipment isn't so accurate in azimuth. This means an aircraft showing at the 12 o'clock position may actually be either left or right of the nose.
An aircraft with no Mode C / ALT still shows up but there is no indication of relative altitude. So the pilot has to scan a much larger quadrant of airspace because he has no real idea of where it is relative to himself (is this one up/down/same level?).
There are a number of pilots who like to talk about the "big sky" theory. After well over a decade of flying TCAS equipped GA helicopters (police and corporate) usually in Class G, I now know the UK sky is often far, far busier than those flying without the equipment probably realise.
We are forever taking avoiding action on aircraft when it's our right of way because pilots have obviously not seen us (either that or the pilots just don't comply with the rules of the air, which I'm less inclined to believe).
Yes, please use Mode C/Alt if you have it.