Given that its largely based on Mozilla, it works fine, the major differences are in the theme, some user interface elements, and its lack of other components. Now, I've been doing the "full install" of Mozilla and Netscape Communicator before it for as long as I can remember, but I don't use any of other components on a regular basis. I'll use the Mail client to send some mail in Korean or run other tests, but for everyday use I'm still using Mutt, so its not like I miss any of the extra components.
I also haven't ever noticed the supposed slowness of launching new windows in Mozilla because of the "bloat". My slowest desktop machine is an 800MHz PIII, and I'm usually under Linux, but new windows of Phoenix and Mozilla load as fast as I can possible need them to. Yes, starting Mozilla on my XP laptop from scratch takes a bit of time (like seconds instead of a second), but I practically always have it running, so its no big deal.
There's one big difference that I'm surprised took me so long to notice: there's no throbber. The only indication that a page is loading the non-greyed out stop button and the hourglass next to mouse cursor (well, and any visible rendering). Now that I've noticed its gone, I've had occassion to want it (is this thing loading?), but I guess my usual internet experience doesn't involve much waiting on pages to load (we have a 100MB Cogent line at work, and SBC DSL at home, I've been modem free for a very long time). The built-in search box is very useful, though I don't really like how you switch between "in page" and "internet" but I'm not sure how to make that better (the Google Toolbar is enter for one, click the icon for the other, which has some benefits). I like'd this search box when Mozilla Mail introduced it, since its largly the closest to the "limit" feature in mutt.
Also, Phoenix now supports "Open in Tabs" for the bookmarks toolbar, so I can open an entire bookmarks folder at once. I do this for my daily browsing, and had been using Galeon instead of Mozilla for just this part of my browsing experience because of that feature (I haven't quite figured out a better way to handle my daily browsing tasks, though I guess an RSS aggregator would get me close).
I don't like the "file this where?" dialog that comes up when you try to bookmark a page, however, as its just annoying. I tend to bookmark things and then occasionally manage my bookmarks, that dialog is just too annoying to use in my "do what I want" standard.
Its supposed to be sorta fixing what remains as my last really annoying habit of Mozilla, and that's the fill-out forms stuff (particularly the login/password stuff). Does anyone use the fill-out forms for anything else? In any case, I really prefer IE's drop down of previous terms, which works a lot like the URL location field and even the search box on Phoenix, but instead on Mozilla/Phoenix you get this pop-up, often before the page is even rendered, asking you to select one. And when you fill out a login, it asks you if you want to remember it (and even on pages which aren't login pages, which is even more annoying). Probably the hardest to fix aspect of this is what to do when you don't remember your login/password... do you tell Mozilla to remember what is potentionally the wrong one?
Oh, and one last problem with Phoenix... I can't seem to make it so that the middle mouse button launches the URL in a new window and not a new tab. I really want that back!
So, mostly thumbs up so far.