I use it occasionally, along with XBox Network (another program similar to XBConnect)
Both work better than the GameSpy Arcade Tunnel Software, but XBox Network works the best. I can't remember what the URL for it is, but do a search and you should come up with it. XBox Network uses better compression of the raw packets then XBConnect does...
Neither work that well on my 1.5Mbit/192Kbps connection though unfortunately. (You need a pretty high upstream with a low latency to be able to play as if it were true system link).
Overall though its pretty good, I can play 1-on-1 with my friend late at night when latency is lower and its a lot of fun.