If you're expecting a perfect replacement for pencil and paper then you're bound to be disappointed. The technology is not perfect, but the Cintiq is more intuitive to use than a traditional graphics tablet. I still do most drawing/sketching on paper, but for painting and 3d sculpting, the hands-on approach on the Cintiq is quite welcome. I undo strokes far less and have a better connection with what I'm doing and how it's affecting the image.
If you're a hobbyist then it would be wise to investigate the Intuos or Bamboo line of tablets first. I use both a regular Intuos tablet and the Cintiq at work and home routinely and find they have their strengths for different tasks. Obviously, you can get amazing results with a regular graphics tablet alone and you shouldn't buy the Cintiq with it in mind that it will automagically make you a better artist. However, it helps my productivity and is a refreshing way to work. The benefit to more ably focus on what you're doing rather than how you're doing it is difficult to quantify, but that's what the Cintiq sets out to do and does it well.
A lot is made of the hefty price tag, but considering you get a very large monitor (which, by the way, in terms of visual quality is better than most regular LCD monitors) and built in capabilities of a large graphics tablet, it's not a bad deal. I use it as my primary monitor for general computer usage as well.
