We use a variant of it in our campaign and it works pretty well for us. It provides a bit more drama, because characters who have taken wound points don't preform as well as those who haven't. Getting hurt actually means something.
As for it being "better" than hit points, that depends on what you want. With the standard vitality rules, a party can go through fights, rest for an hour or two and get into another fight, all without the benefit of magical healing. At the same time, a lucky die roll can endanger even a high level character. IMO, that creates a great tension... sure, you can fight a lot but there is always a real danger.
Modifications to the system that I use (because I can never use anything without changing it):
1) Vitality points recover at the rate of hit points and wounds recover at the rate of ability damage. This makes magical healing important again and makes any kind of damage a little more serious.
2) I use the "negative wounds" rules from Star Wars Revised. It works basically the same as negative hit points, except it kicks in when you run out of wound points. Brings the whole "my character is unconcious and bleeding out" tension back into the game.
3) When the party is fighting a bunch of minions, I don't bother making Fort saves for the minions when they take wound damage. If they take wounds equal to their Fort save mod +5, they are stunned and once they are stunned, they are out of the fight. Major villians and PCs make saves and are stunned per the normal rules.
Overall, I like the vitality/wounds rules because they make taking damage a bit more serious. Even a high level fighter thinks a little before stepping into a fight because even a lowly minion could get the crit that takes him down. We enjoy the tension that brings to the game.