EDIT: Summary of my answer: It does not perform very well as a replacement for a mouse.
Ymmv I guess. I got into the hype as well, bought it, and eventually put it back into its box and considering selling it on eBay. I'm not wholly disappointed with it, but on 27 inch iMac, I found it to be significantly slower for pretty much any kind of operations, compared to a mouse.
Like you, I was very excited when I heard about it, because I had gotten used to the trackpad on a Macbook Pro during a long holiday. Unfortunately, in my opinion, it doesn't translate well on a large screen. On a desktop computer, you expect to have more control than on a laptop. You have more keys, more space. So no, the Magic Trackpad is not a replacement for a mouse, at least not on a 27 inch screen.
What I did like on the trackpad, mostly, was the ability to scroll pages in the browser with the double finger swipe. Task switching with the trackpad was always awkward.
Since I still felt I needed a mouse, I also unwrapped the bluetooth keyboard that came with the iMac, and put the trackpad next to it. That way it took approximately the same space as my aluminium keyboard. Unfortunately I found I had more strain in the wrist because I needed to move the arm between the trackpad and the mouse, and using a cushion under the arm moving sideways from time to time didn't work well. Now that is my opinion as well, but I didn't enjoy the wireless keyboard; it felt cheap and light compared to the aluminium keyboard. Typing on the wired aluminium keyboard felt a lot better. Since it was rather cumbersome to try to fit the trackpad in between a large Aluminium keyboard (comes with keypad) and the mouse, I moved the wireless keyboard and magic trackpad back into their boxes :(
That is my honest opinion. I love Macs. I think the Magic Trackpad is a great idea. I even tried gaming with it. I still wish it worked. But it doesn't. It works better in a few ways, but it can not match the prevision and speed of a mouse.
For a web developer who needs to switch tabs, click small things in the window, toggle the Firebug console and all its panels every now and then, switch between gaezillions of windows; it doesn't work.
Perhaps it is still a good choice for people who do primarily typing and editing documents.
This, for me, would be the perfect aluminium keyboard:
This is not a joke. If that space was used as a trackpad, it would be so convenient to do the swipe gestures for scrolling down webpages. I guess it would be just as useful for most other gestures. Unless you are a hardcore "the vim way" user, like me you will often use the cursor keys. Since the hand often ends up there, and the home/end/pgup/pgwn keys are hardly necessary on a Mac (think Cmd-Left, Cmd-Right, etc), this just makes sense.