horses for courses...
If you go and see many of the top DJs who have honed their craft for years on vinyl you'll find a lot of them are using stuff like this. Most use serato, but I've increasingly seen Ableton getting used as well by the likes of Tong/Sasha etc.
As testament to the rise of just how good Serato is. It's interesting to see how self confessed DJ luddite's like have taken to it. He doesn't do CDJs or laptop tweaking and wouldn't move for years from vinyl - but he now uses Serato and thinks its great. But mainly because he can use it just as he did with the old vinyl - only he arranges his tunes in advance by BPM on the laptop, rather than in his record box - which is what he used to do.
I also think it's great but haven't gone for the plunge yet. Im pretty happy with vinyl/CD & MP3 separately. Incidentally Ive been playing on pioneer DVJ-1000s this week and mixing music videos on DVD is fucking


For all its greatness in convenience though, timecoded vinyls can create more hassle than they're worth. Especially when you turn up to fill a DJ slot in a small club with a tiny booth and you're challenged with having to keep the music going from the previous DJ while you both briefly occupy the same small space in the changeover, while faffing about plugging in your laptop, finding somewhere for it to sit (out of the way of the decks), plugging in your midi timecode unit on the back of the mixer to make it compatible, plug that into the power (if you can find 2 extra slots for laptop and said unit), plug in the extra phono leads you need to go in the line-ins of the mixer (this has to be done one one deck first only to keep the music going from pure vinyl to midi vinyl) and then booting it all up selecting your opening tune and mixing it in with the currently playing track.
Try doing all that and making sure the previous tune hasn't run out yet and you're left with a rapidly clearing dance floor. It's just not practical. Not to mention Ed's point about flying beer and general sweat, dust and smoke all getting on your expensive machine.
But it really depends on the setup. If you could just walk in and everything was in place - time coded vinyl is a choice invention and very convenient.