I'm a biochemist, and I think it's completely useless in cosmetics or food supplements. It's a protein that normally is in many human tissues, including skin. But it cannot be transfered into the skin without a needle (so it will remain onto the suface). And if you eat collagen, it simply digests as any other protein, like those from meat or other food. Cosmetic companies, unlike farmaceutical, generally don't need any strong proof about positive effects. So they think: "There is collagen in skin normally, let's smear skin with some more collagen. It won't cause any harm." P.S. If it helped you, could you correct my grammatical mistakes here:)

Collagen is used in Australia but is very expensive. It is injected into your skin only by a trained health care professional. I have read that by supplementing your skin's own collagen, collagen replacement therapy helps smooth facial lines as well as most types of scars.

http://en.wikipedia.org/wiki/Collagen