The last successfully run campaign my group had was AU (levels 1-11), and we've just upgraded to Arcana Evolved for our new campaign, which is running smoothly after 2 sessions. The game works very well. That said, there are a couple of points about it that bother me in both versions.
1) Item creation. On the whole, I like that the feats gear towards item type (spell-completion instead of scroll, etc.) However, the book suggests that except for alignment specific items, since the game has no alignment, and items that specifically affect races or classes not present in the game (orcbane axe, for example) you can use any item from the DMG. That's both true and untrue in my experience. Many of the spell in AU/AE have some sort of multiplier at the end of their description that affect certain item types. If you follow the rules for items that can be made under both rulesets (e.g. ring of invisibility) you can sometimes get wildly different market prices and its hard to know how to handle character wealth.
2) The magic system is excellent on the whole. The caster characters trade in power in comparison to standard D&D and gain versatility. The simple/complex/exotic breakdown makes for a nice change of pace for the semi-casters (witches, mageblades, runethanes, etc) instead of D&D's marginalized spell use for rangers, paladins, and to some extent bards. A few spells, however, really got on my nerves at times. lessened sorcerous blast is effectively a single target energy substituted fireball for a second level spell slot. Learn from my mistake and note that the lessened version always requires a ranged touch attack and it's not so bad. Heightened drain away speed can stop an encounter in a hurry.
3) Oathsworn is a great class on paper. I found, unfortunately, that it doesn't do as well in practice at least for my style of DMing. I'm sure it can be used successfully, but it requires a lot of work on both the player and the DM, and the story-line may have to be altered to account for it in a way that no other class requires. Ymmv.
4) This isn't so much a gripe as a warning. At least until you're very familiar with the spell system, be very careful how you plan encounters. The PCs often won't have the options you're used to them having. It's not just an issue of damage and healing spells being generally less powerful but an issue of certain effects you assume at certain level ranges not being present. Invisibility isn't available to the PCs until level 5 instead of 3. No spell restores ability damage until level 9. Teleport shows up at the same level (9), but is much more limited, and returning the dead to life is much harder. None of these are problematic as long as you're prepared for them, but they can snag you badly if they catch you unaware.
Still, I love the game and prefer it to D&D both as a DM and a player, and my players agree.
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