We've stayed in a Swedish summer cabin, in the immaculate home of pensioners in the Costa Brava region and shared the perfect location in Barcelona with other travelers.
So far we're 3 for 3 with no weird surprises along the way. The whole process is smooth and everything has turned out exactly as we've imagined it, if not a little better. The website really allows you to screen people. As a guest, I felt like I was not only getting a good deal, but the opportunity to stay in someone else's home really allowed me to travel like a local rather than a tourist. As a host, you even have a security deposit that airbnb holds for you with a credit card in case your guests aren't as great as we were :)
I'm so impressed with the user experience that I don't even mind paying the small fee. As a start-up, it's really exciting to see how well Airbnb is doing.