As far as I know, there's nothing defined to be done with the <title> of each XHTML file, and all implementations I've seen just ignore it. It could conceivably be used in a status bar or something, but more it's likely that would be taken from the ncx file or from "oeb-page-head" elements.
There is some use, however. If you convert the file to PDF with prince, you can define what to do with the <title>, and use it as a running header, for instance, but that's very specialised.
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