I'm with LoveFilm, have been for about 6 months now, haven't had any issues, except for one scratched disk (Resistance on PS3) which they swapped straight away and also sent me an additional game (so I had 3 instead of the usual 2).
I'm on the 2 disks at home, unlimited rentals plus games package, which up is now £11.99/month.
I like the fact you can have multiple rental lists, I have separate lists for games and blu-rays, which means if I send a game back I get another game, if I send a film back I get a film, handy because I can go through 3-4 films while I'm playing through a game.
Never had a problem with not getting latest releases, in fact I got Skyrim off them last week (so that's one of my rentals taken for the next 6 months!!), although I did cheat the system a little, by creating a rental list with just Skyrim on and allocating one of my disks to that
You also get unlimited* LoveFilm player viewing, which isn't amazing quality, but depending if you fancy films as well can be quite useful.
If you're just after games then a dedicated games rental service might be more appropriate if it's cheaper, but if you'd want films too, I wouldn't fault LoveFilm
*(except for a few pay-per-view releases)