I purchased the Ghostwalk campaign setting, and gave it a good read-through. The *concept* is pretty sound, IMO.
Upon a PC's death, the "soul" is whisked away to the city of Manifest, a sort of waystation between death and the end-all Afterlife. Here, the PC can wander about, meet people, go on quests and adventures, or simply (?) return to her body when she is raised or resurrected. Optionally, some souls may return to the Prime and remain in Ghost form (with all the foibles of being incorporeal), but can also earn levels in a Ghost "prestige class" which can earn them more powers to exert more influence on the Prime. There is one PrC for spellcasters and one for non-spellcasters. Also of note is that the living can visit Manifest with the proper planeshifting magic.
The fluff and setting are well-done, though nothing specifically ground-breaking comes to mind. I am in disagreement with the treatment of "Ghosts", however. I would prefer to have a scaling Ghost template (in the vein of Bloodlines from the UA) rather than blowing xp on not-necessarily useful Ghost levels. I mean, if you can only "go ghost" upon your death, a good portion of time is likely going to be spent with 4-5 "dead" levels (har har) while the PC's functional levels and abilities suffer. This is largely campaign-dependent, however. I would strongly suggest using rules like this for solo (especially) or heavily story-based campaigns. I envision Manifest being very similar to the Greek Underworld (especially the Greek Underworld as seen on Hercules/Xena where just about anyone can wander down to say 'hello').
I haven't used this source material in any campaign as of yet, mostly because I run solo campaigns and I feel that this material would detract from any main story arc not related to Manifest or "going ghost". It would be a fad, and I suspect it would be a short-lived fad at that.