Or over the edge, depends on your view. I made the switch a week back and moved all of my contacts, etc. out into GMail. Given my addiction to Blogger, Reader, etc. and my continuous complaints about various IT related mail headaches it was time. Probably past time. How did it go? Easy.
I don't have Gigs of mail or contacts. I was able to open up an IMAP connection to GMail from within Thunderbird (instructions for various clients here) and copied things up. It didn't take too long. I then set up GMail to do POP3 fetching from my ISP and adjusted my email alias forwarder (which may die off, not sure yet) to aim everything at my GMail account.
The result has been positive. Google's spam filters are doing their jobs and the mental switch from "Folders" to "Tags" wasn't as bad as I thought. Setting up filters to automatically tag things is simple enough and helps to quickly eyeball things when at work.
Net result? So far, so good!