OK, I think I might've come up with an example of where a linked list really would be a suitable solution in a small embedded design.

Note that I'm thinking just of a linked list; not dynamic memory allocation (malloc, etc).

Consider the SIM card on a GSM mobile phone.
This is a small embedded system; it needs to store lists of names & phone numbers, text messages, etc.
Entries in these lists need to be added and deleted at random - sounds to me like an ideal application for linked lists?
Of course, that doesn't mean that linked lists are the only solution, but I think other solutions would have their own problems; eg, the need to maintain separate index tables?

NB: I speak from conjecture here, not experience.