I was at the same session as PirateCat but somehow didn't run into him- this was my first D&D Encounter session, and my second time playing D&D total. I thought the night was great. Our DM did a good job of encouraging roleplaying by example (if the player says "I want to make an Intimidate check", he would say "OK, so you want to use your psionic powers to project your voice into the goblin's mind and cow him into submission", not "OK, roll.") and that became infectious in our group. Personally, I would've liked to try my hand at a little more of that style, but it is way more comfortable to just say "I'm using Demon's Dance" then making up some flavor text, esp. if you're new to this. With one exception, everyone in the group had either never played before, or not played in a very long time, but things went very smoothly.
I think the format is great. I have been interested in playing in the past but had a hard time finding people to play, or a group that was playing sessions that weren't eight hour marathons. So, this is right up my alley.