Let me begin by saying that overall, I think the template races are an excellent concept which add tons of flavor to the D&D world. They are especially wonderful (as BluWolf points out) in an NPC/villain capacity.
In our last campaign I played a half-dragon paladin becuase nobody in our group had used any of the templates yet. When this PC joined the group he was 4th level and the other party members were 6th-8th levels. Initially, he was a bit overpowered IMO despite his lower hit dice, BAB, et al. The template had added +2 to his CHA score, and being a paladin that score was already a 16 I believe. So with an 18 CHA he got to add +4 to all of his saving throws (Divine Grace), more than making up for his lower base save numbers. A +8 STR mitigates lower BAB bonuses pretty well, and natural armor helps keep you alive. Add to that his breath weapon and other racial benefits...and well, you can see why I felt the PC was a bit overpowered. By the time he hit 8th or 9th level though, the other characters seemed better equipped to deal with the monsters we were facing. I enjoyed the experience, and would play another template PC in a heartbeat, but nothing that was +3 ECL -- it's just too great a penalty to level progression in the long run.
In our new campaign one of the players has chosen to create a drow character. It seems in the early going that he's happy with the roleplaying aspects of the template race (just like I was), but a bit miffed at the slow climb in class levels. My advice to you, is give it a go for the sheer fun of playing a unique PC. Just be prepared for the benefits you receive to seem less and less valuable as XP builds, and your party companion's abilities soar.