Yah for sure, it is not perfect but it is pretty good.
In my use case, I don't support IE7 (won't work at all on my SAAS app), and I only support browser clients.
I have simulated LB failures by killing nginx, and watched traffic flow over to the other LB without a big delay (in 30 seconds everyone was over).
Fancier IP failover is nice for sure, and would let some more enterprisey people in.. but for a lot of apps out there, DNS failover works great. Surprised from above how many people don't realize it exists or works so well (for so little effort).
killing nginx is good for testing load balancer application crashed, but insufficient for testing load balancer host mysteriously vanished; for that I would set your firewall to drop incoming SYNs on the load balanced port. You'll have a much bigger client side delay when there's no response than when there's a quick port closed response.
Like I said in previous posts, I don't think it the end all rock solid load balancer answer. But I like to sleep through the night, and if having a short pause the one night a year a load balancer crash happens, my uptime is way higher than most of the internet.
Among other things, IE7 will pin IPs for 30 minutes, non-browser clients may have serious issues, etc.