It really works great. I even use actors for major NPC's. I have found that type casting is a wonderful tool as well.
When I needed an evil and crafty despot who was somewhat aged, I chose Peter Cushing to play him. (Peter Cushing played Grand Moff Tarkin in Star Wars)
The party has a rather wealthy landowner who inherited most of her holdings from her father. She supports the arts and adventures in her off time. She is of course played by Anjelina Jolie, but her name is not Lara.
One of my players is a wizard and he also has four wives, insert the cast of The Craft.
Whenever I need a powerful introduction I use the actor's name as an instant source of recognition. For instance, once they were travelling in an oriental setting and they ran across this guy who needed to be a bad-a$$ monk. So here is how I described it:
You walk up the beach, and standing at the top of the hill, you see Bolo Yeung (the bad guy from Blood Sport, that really poopy Jean Claude Van Dame movie). He has a length of rope with a spike on the end wrapped curiously about his fore-arm. He is standing in a combat stance. He looks at you and says "This is MY island! Leave now!"
The PC's never fought him. They had all seen enough kung-faux movies that they "knew" if I was using Bolo Yeung that he would be a bad MF'er. Is it realistic? No. But he was supposed to be intimidating, and they were definately intimidated. No dice needed to be rolled, and it was FAR more memorable a scene.