I've been using CyanogenMod since 7.0.0-rc1 on my Nexus One.
On the plus side, it really is amazingly configurable, looks better and feels faster/more responsive than stock Android 2.2, comes with a terminal emulator and a pretty decent FM radio app, and best of all, it lets you use the camera flash as a super-bright flashlight! (the stock firmware doesn't allow that).
On the minus side - battery life is on average worse than with stock Android 2.2; I've had it corrupt my SD card's filesystem on one occasion (fixed using fsck.vfat on my desktop machine); and on another occasion, the screen started becoming intermittently corrupt (fixed by a hard reboot, i.e. pulling out the battery).