A couple of uni friends of mine rode the whole thing (Healesville to Cooktown) over a few months about ten years ago, so it is ridable. It does seem to be mostly on 4WD tracks rather than walking trail
I've driven some of it in the Big River-Knockwood-Lazarini Spur-Wonangatta area, and 'lumpy' is probably a fairly generous description. The track in that area is mostly rocky/dusty rutted 4wd track that is either going steeply up or steeply down - we found grades of 30 to 35% to be common, with some great waterbars - so fairly punishing riding.
The camp sites are recommended at distances that suit horses, so you could probably get more distance in a day depending on how much you wanted to push yourself.
Not sure which edition of the guidebook you're looking at, but a lot of the advice for riders that I've seen is about 15 years old and is not aimed at serious mountain bikers, but more touring riders with rigid mountain bikes.
We've been contemplating doing the section from Healesville to Omeo, the thing that's stalling us at the moment (apart from laziness), is that while it goes through some beautiful country, it doesn't go through the most spectacular parts of the Vic Alps. This is because it was set up to be a horse-riding trail, so it generally stays out of the National Park. We've thought of using it as a base route and deviating into some more interesting areas.
