What is the benefit of a leather lined hiking boot?

Why would you want a leather lined boot?  In a word...COMFORT.  Leather is used on the outside of hiking boots for protection...there is nothing more comfortable or durable.  When it is used inside a boot--as is commonly done in Europe--it adds to the comfort and durability of that boot or shoe.  It is helpful to think of leather as your second skin--with pores and all--because that's what it is.  A leather boot lining is literally "soft" skin placed inside the boot that will stretch and contract for a custom fit. 

Folks who are desk-bound all day often choose their footwear for style...yes, these shoes are minimally protective and often minimally comfortable.  But if you are going to be on your feet all day working, hiking, guiding, or hunting you need serious protection for your feet and you want your feet to be comfortable over many miles of abusive use. Good leather boots can do this. 

You also want your shoes or boots to keep your feet warm and dry.  The exterior leather on a pair of hiking or field boots comes treated with specially formulated waxes or creams that repel water and extend the life of your footwear.  Leather linings are tanned but not dyed or treated.  This leather is natural which allows its pores to stay open, absorbing and tranfering moisture to keep your feet comfortable all day long.  Follow this link for a good description on how Lowa leather lined boots make this happen. 

Of course you might put a premium on keeping your feet dry.  Gore-Tex linings excel at this.  Waterproof and breathable, Gore-Tex keeps rain out but wicks away sweat.  Click on this link or a good comparison of leather lined boots versus Gore-Tex boots.  Leather boot linings don't offer this extra layer of waterproof protection, so it's imperative that you take proper care of your boots' leather shell.  If you've got the time, Lowa provides and excellent, detailed set of instructions for the Care of Leather Boots.  Take care of your boots, take care of your feet.  You won't be sorry.