I would have to say that this is probably one of the top five Ravenloft products I have ever come across. The concept of a two-dimensional campaign - one a standard Ravenloft campaign, the other a continuing fight against the sinister forces of the Nightmare Court - is one that inspired an interest that has yet to be quelled.
This is not to say that the supplement is without flaws, however. The rules given for running adventures in dreamscapes are lengthy, complicated, and often confusing, but a good DM should be able to sift through them and make a few adjustments for ease of use. A larger problem (in my opinion) is the lack of functional advice to DMs for really bringing these dream-based adventures to life. One is forced to do one's best by simply looking at the provided adventures and learning by example. The fact that the adventures are quite brief (and often, in my opinion, a bit rushed) does not help matters.
Where the supplement really shines is in its concept. The first book, the Journal of Dr. Ilhousen, does a wonderful job setting up the overall mood, providing a picture of a man of science on the very brink of collapse and doing his utmost to preserve the rational workings of his mind. It is very difficult to put down, and in all honesty it may have been a better idea to have thinned the supplement down to only this book and the provided monstrous compendium, leaving it to the DM to decide just how to fit it all together.
Also worth noting is the ease with with this particular supplement converts to 3rd edition, albeit only with the help of a couple other supplements (Denizens of Darkness, etc.).
Overall, I'd say the supplement is worth having just on general principles, although the amount of work a DM must do to really make it his own prevents it from garnering a perfect rating.
[4 of 5 Stars!]