a PC in our monthly game is a half-dragon, and, IMO, it doesn't work very well
of the three half- template creatures in the MM, the half-dragon is the only one that has an effect on hit points (raises one die type), but this hasn't helped the PC at all. because his overall level is lower with the template (compared to the other PCs), he doesn't have the hit points to stay in combat very long. in fact, in every major battle the half-dragon has participated in, he's been unconcious by round three.
the abilities of a half-dragon aren't that great, either. the breath weapon in only usable once per day, and neither the damage nor the DC improve as the character gains levels.
the half-celestial and -fiend will also have hit point problems, but at least their special abilities increase with their levels.