I think British (well, most of the world actually) people tend to be a bit snobbish on this issue, and view dubbing as some kind of heinous crime which ruins the atmosphere of a film.
However, it does depend on the quality of dubbing and the voice actors used. In Germany, subtitles are somewhat frowned upon and the vast majority of foreign (i.e. Hollywood) films are dubbed. They actually have people specifically cast to voice specific actors whose voices fits well - e.g. Arnie has his own 'voice guy'. Overall the quality is much better than what we are used to, it's not like those dodgy german porn flicks.
An example of a dubbed film I saw a few years ago which I thought was fine would be La vita e bella (Life is Beautiful). I had the typical Brit snob attitude and was poised to jump on anything which didn't feel right, but pretty soon I was so wrapped up in the story I forgot all about it.
That said, I don't have a problem with subtitles. The only issue really is that it draws your eyes away from the centre of the screen and sometimes prevents you from picking up on facial expressions and suchlike.