I've just signed up for the service on this site, and if you're eagle eyed as the page loads you'll see requests to google-analytics.com.
I've begun an overview of Google Analytics and will expand on that as I analyze Analytics.
The C|NET article sounds like sour grapes. It quotes a handful of people saying the launch was bumpy, but really can't you expect that with a new service? It's interesting that the article make it sound like the initial popularity is greater than Google expected. Having done a brief once-over I can fully understand ... this is excellent stuff. On looking at the reports from just 1 day of traffic, I see much more detail than is in the packages I've been using.
I think Google has really raised the bar on excellence in traffic reporting.