I bought one of these to try for my dad, because all the stats looked good on paper, and it was pretty cheap. It physically looks nice and does work, but I ended up returning it.
The Mac (10.6.2) had no trouble recognizing it, and indeed was quite happy to display/record video at the full 1280x720 resolution. However, neither the autofocus nor any brightness adjustment works--those are apparently controlled by a computer-side driver, not automatically by the camera. Since there's no Mac driver (apart from the basic universal camera support), you don't get these features.
I wasn't particularly surprised by this, but it made it nearly unusable--in regular indoor artificial lighting at roughly arm's length or so from the screen it looked acceptable, but if the light was any brighter it gets horribly washed out, to the point it's pretty much unusable if the sun is out and the blinds are open. I've seen the same thing happen on cameras on Windows if you don't install the driver (heck, some older ones can't be adjusted at all, and are pretty much useless in bright light).
I also wasn't particularly impressed by the quality--though it put out a hi-def image, the actual quality was mediocre. Again, not terribly surprising given the price, but I was unimpressed. It also seemed a little laggy at the hi-def resolution, though this may have been the Mac software's fault, not the camera's. It seemed normal at a standard-def resolution.
I suppose if you only ever intended to use the camera at night and didn't care about autofocus it wouldn't be a bad choice, but you could probably get similar quality and (lack of) features for less money were that the case.
Me, I returned it and ended up buying a Logitech QuickCam Vision Pro for Mac--unlike the MS camera (and the cheaper Logitech Pro 9000) it does the brightness adjustment and autofocus automatically in hardware, so it fully supports these features on the Mac and without any additional software. It's not widescreen (or hi-def), and I don't think it's as attractive as the MS camera, but it works very well, and I'd say the image quality is somewhat higher, too, so I'm happy with it. Cost somewhere around $80 after rebate, which isn't all that much more than the MS cam or Logitech 9000.
Gotta say I like the manual that came with the Logitech camera--it essentially says "Plug it in and you're done."