I've shopped CarMax before, but never bought from them. I've had a buddy buy a car there before though.
From our experience, their prices are non-negotiable. Their system will lower the price on cars that are not moving, but I don't believe you can negotiate a lower price. You can watch prices on a car that you like online, but they do move inventory pretty quickly so you might miss it. I really believe there are people that don't shop anywhere else, because CarMax prices are rarely the lowest, and sometimes barely competitive
My buddy bought a car and then had it inspected. The mechanic pointed out some things and commented on how much rust had accumulated. We aren't used to rust in Texas, so my buddy took the car back. The no-hassle return is where CarMax earns its consideration from me. He had no issues returning the car and getting his money back.
I agree about their selection. They usually have several models I am considering, but rarely have a car that I would actually buy (wrong color, no options, etc.)