LEDs are good where low levels of light are required.
I've got some 'super-flux' LEDs (far more light than conventional LEDs, although not as 'bright' due to a wider beam) which are widely used as automotive tail lights - they are also excellent for decorative lighting. However, for illumination, they really aren't bright enough.
There are some new very high light output LEDs, sold under the brand name 'luxeon' - the most powerful white model is about as bright as a 15 W light bulb, but has the advantage of using only 5W power, and lasting at least 25,000 hours (and potentially as long as 100,000). Disadvantages are the need for heatsinking and the high cost ($40 each in small quantities!!)
Luxeon LEDs are bright enough to be useful, but at $10 each for the low-power (1W) ones, they are not mainstream. However they have found uses in portable devices such as flashlights, and bicycle or caving lamps. Coloured Luxeon LEDs have also found their way into auditorium and stage lighting where RGB mixing provides new found lighting flexibility.
Power efficiency for white LEDs is about the same as a good halogen bulb, slightly better than a conventional incandescent, but considerably worse than a fluorescent. Coloured LEDs are more efficient.