I've been using KDE 4.2 since the first beta on Kubuntu 8.10. There have been a few things I had to fix myself that typical end users probably wouldn't be able to figure out, but mostly that's been distribution related (conflicting audio servers, and for some reason I ended up with two power management daemons at first).
To be honest I like it so much I was even using it every day before Nvidia released updated drivers. Before the drivers things were a little slow and glitchy. But now everything is smooth and fast.
Plasma has been improved substantially in this release. It's very usable. I really like the idea of FolderView widgers. When you drag a folder from the file manager to the desktop you get a little menu asking if you want an icon or a FolderView. Plasma also lets you have multiple "activities". So I have a desktop set up for quick access to my music and videos, another one for reading comics, and a few more that a project specific. This is so much better than a single desktop folder. What they still need to work on though is removing some of the confusion between Plasma's multiple desktops (which controls the contents of the desktop background) and KWin's multiple desktops (which lets you have application windows on different virtual desktops like any decent window manager).
I also really like being able to place multiple images on the background (in the picture frame plasmoid, which also does slide shows).
Amarok 2.0 deserves special mention. It still doesn't have all the features from the 1.x series (notably the ability to transcode on the fly when you transfer to your mp3 player) but I am very impressed with the interface. It has its own Plasma containment for holding widgets, and when you drag items from your library to the playlist this containment becomes a set of drop targets for "append to play list", "queue" etc.
KTorrent is now my favourite bittorrent client. Actually KTorrent was pretty usable back when 4.0 was released, I even used it in Gnome for a while.
Kontact, KMail and the rest of the PIM suite I'm not so sure about. They're connected to Akonadi which hasn't been working very well for me. I loved KMail back in the KDE 2 and 3 days.
Dolphin is a pretty decent file manager. The only thing I really miss from Nautilus is the spatial mode, but at least they added tree style expandable folders in the list view.
In general I'd call this a good-for-end-users release. Hopefully there will have been a few 4.2.x point releases before Kubuntu 9.04 is released to clear up any remaining bugs.
In terms of speed the system is very usable. On my Core 2 Duo with 2 GB of ram it seems just as fast as using Gnome. On my friend's Pentium M with 512 MB of ram it's usable, but not as snappy as Gnome.
Since I've been using KDE 4.2 on my laptop, I've had a lot of people notice how cool Linux is. Instead of trying to show them something and explain it while their eyes gloss over, they're asking questions and wanting to know if it would work on their computer. That doesn't mean they're going to try it (on Linux at least) but it does mean that KDE has finally figured out how to be visually appealing to non-nerds. The default theme in 4 is much better than Keramik from 3.1, that's for damn sure.
So to answer your question, this is the release that distributions should have waited for before replacing KDE 3.5. It was simply madness that so many distros went to 4.0 and 4.1 as a default and not letting users switch back to 3.5.
If you have a Unix-ish desktop KDE 4.2 is definitely worth a try. It's probably also worth a try on Windows and Mac but I don't have those so I can't comment on them. Still, if you have a free afternoon and you're a big nerd like me who enjoys playing with new software, KDE 4.2 is worth a try.