Never had any major problems with it & I bought 24 PC games with it since 2007! Its not perfect but then again neither is Steam. Also a lot of poorly researched myths being put around which many take as fact :
From being a longtime user I can confirm the following:
1: For ages (at least a year) you can buy content with either Credit Card or MS Points.
2: GFWL Marketplace is just a small app to buy content & then it can be closed once the download has finished. It also maxes out your connection when downloading.
3: There are no limits to how many times you can download content.
4: The activation limits info for games bought via Games on Demand is on their official forums its not hidden at all anyone can see it as long as they can read! You get 5 per month on any hardware after that its a phone call so you get a minimum of 60 per year!!!
http://forums.gamesforwindows.com/t/9446.aspx
Retail games are usually 15 activations before it needs a phone call. About the same as other DRM no better no worse. All of this is set by the publishers not MS.
5: Encrypted Save Games. Gears Of War & Halo2 are the exceptions as its not possilbe to back up those saves. All other games which use GFWL are possible. The trick is to either:
A: Backup the entire folder which contains the saves so for example on my Batman AA GOTY the save folder is called "e000161a00000001". Now all I do is backup this folder then say I reinstall the OS play the game again & create a new save game. Now exit the game & look in the new save folder created which maybe called for example "e000161a5d2b4373" I just rename it to the original name & copy the contents over. That's it works ok everytime.
B: Or most times it will create a save folder with the same name as your gamertag. Just copy this over and it works.
6: You can play offline with any GFWL game just create a local profile & it will save games still.
7: Almost every single connection issue is caused by the users PC security/ISP settings!! They are also very simple to sort out
A: Just look in the Network part of the GFWL menu inagame. If you do not have either: SSDP Service enabled + Open NAT then yes your GFWL will not function correctly until you configure this. This is also the reason why you drop out of Co-Op or MP games either in the lobby or ingame.
B: Make sure your firewall is not blocking the app as some non MS ones are too strict & block anything so you cannot blame GFWL for that can you
C: Make sure you have the following ports open:
- TCP 80
- UDP 88
- UDP 3074
- TCP 3074
- UDP 53
- TCP 53
- TCP 443
Configure this properly & you will never have a GFWL issue again its really that simple which is why MS has a lot of staff on their technical forums to help obscure issues with unsupported routers.
You should not have to but if GFWL opened these on installation people would complain so they cannot win. A lot of it is caused by ISP's blocking these by default anyway.
GFWL is not perfect but the achievements aspect does add to certain PC Games & make you explore areas or sub missions you may have otherwise missed like Fallout3 or Dead Rising2.
I now think that GFWL & Steam need to merge to create one service using the best of both. Right now PC gaming needs all the support it can get as even when PC games sell well Publishers/Developers are more interested in taking easy console money instead

There is obviously a lot of money in PC gaming still especially from EU & Asia (US is dying out in the mainstream PC gaming market). I think a lot of console gamers once they see PC gaming @ much high res & with better gfx quickly make the jump which is why I think services like GFWL still have a future. Steam is really just Valve's business model it was never meant to be a PC gaming platform at all. GFWL is MS keeping their hand in as thye can probably guess the future of gaming is PC more than another console so I can guess GFWL will continue to grow!
BTW: If anyone has any technical issues with GFWL not working properly on their PC post here I can advise you very quickly how to resolve its really so easy to do!