I have several clients using Magento and it's definitely the best e-commerce solution available right now. In the beginning there were a lot of performance issues, but most of those problems have been addressed now. I'm wondering what's going to happen with the free version of Magento. They don't mention anything about it.
The performance issues have just been masked with caching. The template layer makes hundreds of useless classes each request. Could speed it up 40% or so with flyweight pattern on the template classes. Could reduce memory usage each request by not using XML config files and not included configs for modules that are turned off.