I've been using one for a few months now with my (now) 22 month old girl. She loves it! I don't really have time to take my helmet off after work before she's running out wanting to go out for a ride. If you add 'em all up, we quite regularly do 30km+ together on a Saturday or Sunday.
Couple of things to bear in mind, though:
i) It does change your riding position quite a bit. be prepared for no standing, and for an odd kind of knees-out position. Also, if you're a short arse like me then you have no chance of ever touching the ground from a seated position, so with the wee-ride eliminating anything that used to be stand-over height, you'll need to be ready to actually dismount whenever you need to stop.
ii) It works fine on my xc frame, but I'm actually looking at getting a wee-ride specific bike that my wife can ride as well. This is mainly because I think a more upright riding position would work better--at the moment I'm not exactly flatbacked, and my daughter's tiny, but I'm still scraping the top of her helmet with my chin.
ii) Watch the feet! Unlike a lot of rear-mounted seats (which, to be honest, I've never used) the feet can't be strapped in. This isn't usually a problem, but occasionally she feels like putting her feet up, and the obvious place is the bars. This can get quite exciting--when you're checking for traffic and suddenly your bike starts jerking to the right!
Hmmm...just realised how negative I'm sounding. Just wanted to make sure people knew about the downsides before i started raving. This thing is bloody great. My daughter loves it, and I love it. It's totally interactive. She puts her hands on my knees and helps me pedal, she points things out and asks me about stuff, and I can see her when she tries to pull a Houdini with the harness!!
Regarding helmets: there are a few good brands out there. I narrowed it down to a few then went with the best fit. Some of them have a kind of adjustable internal strap that lets them grow with your child's head. Tioga have some nice designs if you're not keen on Dora the Explorer ;-)
http://www.bikes.com.au/p/671799/tioga-lil-bub-helmet.html