I was in Fiji back in December where a lot of the kava comes from. There the locals grind up the root in to a powder, mix it with water and drink it like a big shot from a coconut shell.
I participated in a few kava ceremonies myself

. For me, it made my lips and tongue tingle and that was about it. I've never slept so well in my life, when I actually got around to sleeping that is

.
As far as medical side effects, there are several natives that frequently abuse it. No one in Fiji mentioned anything about liver damage. What seems to happen to the abusers is their skin gets hard and scaley. When I say scaley, I mean exactly like a fish, with overlapping pieces of hard, tough skin.
I can't speak for the pills sold here in the states as I have never taken them and never would. As long as this stuff isn't regulated you never know what the companies are mixing in with the pills.
Edit - spelling