Overall it does a very good job of what it is designed to do - it is nicely designed, simple and works well.
As mentioned by the previous poster, from a user experience point of view, it is like XP with an extra suite of programs added brought together in a simple interface that you can control from the couch via remote control.
I especially like the PVR/Tivo type functionality (Electronic Program Guide, Record TV) and this is the main additional feature that I use.
A lot of the other features you probably have in some shape or form, e.g. organising music, editing pictures etc. Personally, I am still using itunes for Music because I have an iPod.
So a thumbs up from me, especially if you want the TV recording features. However, I wouldn't go spend a huge amount upgrading hardware just to get it immediately - you can get most of the features in seperate programs, they are just not as well put together.
Here are a few caveats:
1) If you are buying a TV tuner or a PC/laptop which included a TV tuner for Media Centre ensure that it is on Microsoft's list of fully compatible tuners - the Media Centre part of the software will ignore the tuner unless it is. I bought a laptop from Dell with a USB Avermedia TV tuner and it was not fully compatible (it came with seperate software for recording that had no EPG and was very poor in comparison - I had to go out and buy one). I was quite disappointed in Dell for selling me this without making it clear that it wasn't properly compatible.
2) Compared to XP Pro, the networking options are slightly constricted (for example, domain use). This won't be a problem for most home users.
3) Don't forget the laptop/PC noise if you are thinking of using media centre in your living room. I leave my laptop running so it can record TV etc. but when there is no other noise in the room you can here the hum.
4) An obvious one this - if you are going to use it in the living room, make sure that you have a spare input connection on the TV - its not much fun having to switch in and out connections.
5) Finally, I have a fairly old TV and the picture is not as good as when I watch TV directly from cable - I think replacing the TV (eventually) with a higher resolution LCD or Plasma will give a much better experience.
I hope this helps!
Lanky