I think what some people take exception to with D20 is that they come into it believing what it claims- that it can be ported into any genre, any style of play. But this is simply not true. D20 works well for heroic, cinematic styles of games, but it is terrible for more realistic types of games, or for games that do not include a huge power disparity between inexperienced and experienced characters. I would NEVER try to run a horror game under D20- the mechanics of the system are simply not conducive to the feelings of isolation, helplessness, and terror- the characters are too empowered. I've played D20 now since it came out, and there are a few big faults/holes in the system as I see it.
1. Huge power disparities between low and high level characters. This one is particularly irksome, becasue by the time a character hits 5th level or so, he has nothing to worry about from being mobbed by half a dozen 1st level characters- they are simply so much cannon fodder. Granted, this is a problem to me because I like more realistic style games, and D20 is designed for the cinematic feel. But to me there IS a problem with a single character routing off an entire army- it completely kills my suspension of disbelief. This has been a problem of D&D for me since day 1, but especially in 3E with the power inflation of characters compared to previous editions.
2. Complete randomness dominates at low levels, while randomness plays almost no part at high levels. Rolling a D20 and adding a bonus is simple in play, but produces diametrically opposed results at low and high levels. At low level, everything the character does depends on chance, he's at the mercy of fate. At high levels, the die roll often becomes completely irrelevelent- the bonus is either so high that success is guaranteed, or so low that success is impossible.
3. D&D (and most D20 games to some extent) DO encourage hack-n-slash over roleplaying. I know I'll get in a heap of trouble over this one, but IME its true. Experience in D&D is given for overcoming challenges (aka, killing things), they simply used the "overcoming challenges" lingo in an attempt to take some fire out of the D&D=hack-n-slash crowd's arguements. Experience in most D20 games is NOT given for good roleplaying, and the sad ad hoc experience paragraph in the DMG is basically useless to a less experienced DM wanting to reward XP for things other than killing. Most players, when they hear XP is given for killing critters will simply kill the critters in hopes of garnering more XP. If they are rewarded for this, why shouldn't they really? Its built into the system to reward indiscrimintate violence. And if you are slaughtering someone, its awfully hard to roleplay out an interesting dialogue with them- hence, in many cases, D&D discourages roleplaying. Also, I feel that 3E/3.5 encourages hack-n-slash more than previous editions did- the whole "back to the dungeon" thing. It has been explicitly stated when 3E came out that the classes were balanced against each other for USE IN A DUNGEON. I don't know about everyone else, but every dungeon adventure I have ever played has ALWAYS been about breaking down the doors, killing the monsters,and taking its stuff- and the adventures from WotC bear this out. This can be fun once in a while, but it gets really old, really fast. I have been lucky enough over the last 10 years to play with a group where this isn't the case, but I have also played briefly with 4 other groups over that time- and hack-n-slash is overpoweringly preferred by most of the D&D crowd.
4. This is the biggie for me- D20 games are a nightmare as far as prepping for them. Yes, I know the D20 rules well, and I try to make interesting and unique NPCs. Unfortunately, this takes a huge amount of time to do with D20- there are so many feats, skill points, magic items, and interrelated bonuses to consider that my prep time for statting ALONE has increased 300-500% from my 1E and 2E days. If I'm going to spend that much more time prepping for a game, I'd rather it be thinking of interesting characters, environments, or more complex roleplaying situations than making stats. This has affected my enjoyment of D20 games, to the point where I no longer enjoy prepping for them, and running them seems more like a chore than fun. I'm still interested in the fantasy genre and gaming, but D20 feels like a lead weight hung around my neck- its holding me back, not aiding me.
So my answer to you Storm Gorm, would be that D20 isn't the best system out there. Its good for a heroic, cinematic style game with lots of violence and bigger than life characters, but terrible for other genres or styles. My answer was to stop running D20 for the forseeable future, and go with games that are more suited to my tastes- Savage Worlds, Deadlands, and BRP namely. By the way, if you are wanting a game similar to FUDGE in that it can handle multiple genres seamlessly, give Savage Worlds a try- you won't regret it.