I was asking myself these same questions about a month ago when I was buying a new bike. My LBS offered to let me ride with the Polar Power Kit for a few weeks and see how it did. Their comment to me at the time was that they have had about a 50/50 success rate with the Polar Power Kits, meaning that only 50% of the ones that they install end up working properly. As far as the install goes, it is really pretty simple to get everything routed and zip-tied into place. Polar's design is actually pretty good, and their recommended install approach is pretty easy to translate to the bike. The LBS had done enough of them that they sent me out with a fairly good setup. As a part of my subsequent troubleshooting, I nevertheless ended up having to raise one end of the power unit with a shim so that the entire length of the main sensor unit road parallel to the drive chain. Otherwise, I would get readings that would drop in and out, especially when I was changing rings and gears a lot.
From the start, I had trouble with the head unit (bike mount) losing contact with the receiver (725i HRM), mostly when I hit bumps or when I pressed a button to record a lap or change the readout. That problem was fairly predictable and easy enough to identify, but I never could find a way to consistently prevent it. As a result, in an hour ride, I probably spent 10 minutes of it trying to nudge/coax the receiver back into place with the head unit contact points. I tried everything short of welding the HRM into place with the contacts, but never could get the head unit and receiver to consistently hold a connection during a ride. That above all else absolutely and psychotically sucked.
I also had a lot of trouble from the start with the main unit's (power sensor) power readings cutting in and out. I was finally able to determine (mostly from reading forums) that the problem typically traced back to a weak or ineffective connection between the cadence magnet and the main unit. I was never able to keep a good cadence connection with the magnet that Polar supplied. It was just too small. There were suggestions about how to get a bigger magnet in place to correct the problem, which I tried. The first thing that I noticed thought was that the bigger magnet would tug really hard on your chain. Several times, I had the magnet pop right off the crank arm and lodge on the chain or worse down in the cassette. When that happens, or even if you just lose a good contact between the magnet and the main unit's sensor, you not only lose the cadence information on your receiver but also the power readings. Even with the suggested BAM (big ass magnet) held in place by frikkin fiber tape I was never able to get through a training ride without losing the cadence readings, power readings and associated ride data.
I took the unit back to the LBS last week and have been using their PowerTap training/demo wheel ever since. I find it a lot easier to use, and with power readings that are a whole lot more reliable and true than what I was getting from the Polar unit...in those times when I could get it to properly work. I have yet to have a problem one with the PowerTap set up.
Having said all of that, I know that there are guys who have the Polar Power Kit and continue to use it without any trouble at all. Even as the LBS points out, 50% of the units they sell never come back with reports of problems. For me, the Polar approach just didn't work out, and the main thing that I am looking for is reliable ride and power data.
Hope this helps!
