Woah, nothing like a good ol' controversy. I too practiced more when I was younger: practice meaning repeating scales, arpeggios, new chords and such for hours and hours. I had nothing better to do. I wish, though, that I had learned some more rudimentary skills properly - I'm probably of the earlier spoilt generation Mike mentioned - so I would jump ahead whenever possible, when I ALMOST had it. HoboSage/Wes were right about the Blues!! Playing for fun and playing with others soon took over and now I only consciously practice a new instrument like John says. Or if I want to teach myself something new in my instrument, like I did with 'latin feel' guitar lately. It all goes towards serving the current song or song cycle I'm writing.
However, I feel strongly that a practice regimen is the key to better playing, writing and understanding of music and here's why. UNLESS you're a prodigy, a lot of what we come up with seems really cool at the time but it almost always forms part of some already-held musical theory, drill or body of knowledge, like Layne said. Not being unkind here, but few of us are truly original, and that's OK. But it's no point believing you're really talented or unique if the body of knowledge is already there! Why not just immerse yourself in the thousand years of combined musical cultures already at your fingertips? It means that when just mucking around, creating, jamming, whatever there will be so much more to draw on than if you stayed 'individual' like Mike points out. I have written songs for 30 or so years but I would be all the better, even professional perhaps if I had kept up a practice regimen, learnt more when I had the time, worked out where my meanderings fit into the great and wonderful world of music theory and nailed them, then.
No regrets, but I do take practice more seriously now. If I have to play live or for a recording I get it perfect first before I play or sing a note. Works for me. Good thread.