I've used it in Budapest, Vienna, and Hong Kong and had great experiences. Got to stay in great places at a fraction of hotel costs, with WAY more amenities - kitchen, free wifi, better locations for transit, and way roomier (except Hong Kong, but the price was right!).
I only had one bad experience, in Paris - the place was really bad. 8th floor with no elevator (not mentioned in the ad). No reviews, minimal pictures. There was a makeshift loft bed built in with a wet mattress, and the landlord was puzzled why that bothered me - she said something like "Of course it's damp, it's raining outside" (I guess any time it rained water leaked into the bed?). We abandoned it within an hour and rented an apartment through a hostel my boyfriend had stayed in before. However, AirBNB has fantastic customer service and I had a full refund within a few days.
I only stay in places with several good reviews now, and lots of pictures. That seems to do the trick.