I guess somebody has to post from the "love it" camp. I've noticed no problems as a result of using it, and I have a couple of utility widgets on my desktop all the time. The initial release had a pretty nasty memory leak, but they patched that quickly.
Note for maradong: Since OS X wants to align icons to the right edge of the screen, why not put widgets along the left? That's how I do it. Then if your desktop is so full of icons that the widgets get in the way, then you've got no business calling your desktop "useful."
EDIT (also for maradong): I just installed the new version, and you can do EXACTLY what you want. In the widget preferences, set "Level of Window" to "Desktop" and your icons go on top of your widget.