Ironically, the purpose of many novelties is that they have no obvious practical purpose. This need not be the case however, as some novelties to have a practical purpose. It may be more accurate to say that practicality is not the hallmark of a novelty. Their purpose is often to provide some kind of non-rational enjoyment. They are often funny and silly.
Perhaps the most common application of the word "novelty" is in reference to a novelty item. These items, commonly given as gifts or party favors, are often impractical and have value in virtue of its silliness. One common example is over-sized novelty sunglasses. This item, while practical in the sense that you can wear them and they really do shade your eyes from the sun, is impractical given the fact that no one would seriously considering wearing them on a daily basis. Another more practical example might be a "piggy" bank shaped like a person's bum. This is a novelty item that someone might actually use on a daily basis to store his change. Further examples include police caution tape, trick golf balls, LED flashlights and bizarre action figures (e.g. of Barack Obama or some other prominent figure.)
Experiences are sometimes thought of as novelties as well. Going on a trip to a new city or country might be one example of a novel experience. Another might be waterskiing on one ski when in the past you have only ever tried waterskiing on two skis.
People also speak about novel ideas. These are ideas that have not been thought of before or have not been tried before, but may be worth trying in the future. For example, someone might say, "Let's have a picnic on the lake by placing two legs of a picnic table in one canoe and the other two legs in another canoe. Then we can sit at the picnic table on the lake!" Someone might well respond, "What a novel idea!"