It is hard to tell if Gamefly is a good service or not. Since I have joined, I have recieved 2 games and have not yet returned them. I think the service may be a good thing overall, but there sure are not a lot of Xbox 360 games! That however, is not Gamefly's fault.
The one thing that has annoyed me so far is when signing up, you can only sign up for a 2 game plan. You must wait until after 60 days for a 3 game plan. Why? They have your address and credit card info. What do they have to lose?