I'm using Google Apps for Domains for all my domains ; phomago.com, oxle.com and oxle.nl in one group and Scoutingkeentmoesel.nl in another.
I'm using it via IMAP on my iPhone, my wife's using it on her HTC Hero (Android), and it all works great.
On the Scoutingkeentmoesel.nl realm however we've been experiencing some issues with the mailinglists ; they're using mailingslists that send mails outside the scoutingkeentmoesel.nl domain (such as hotmail, gmail and ISP specific SMTP addresses) quite heavily there but the users are mentioning that they notice delivery delays, and some mails not reaching all listmembers.
However, the ones that use the Google Apps accounts directly are very happy with it.
Privacy may be an issue if you do not trust Google to be a trustworthy supplier, and yes potentially Google knows too much.
With respect to POP and IMAP : I've been using the IMAP connection at home in Outlook for a while and on my iPhone it's exclusively on IMAP. However, when on a PC I just use the webinterface (
http://mymail.oxle.com) and I think it works better than Outlook. The only thing I'm missing is support for multiple signatures. That can be achieved with some FireFox plugins, but not out of the box.