I crew on a jet boat which gets some pretty rough treatment. The jet is Castoldi and we've decided on a pair for the next boat so they can't be too bad. Generally we get good performance.
Here are some advantages and disadvantages over a prop:
Jets will give stearage when the boat is static since the jet is always pumping water and the rudder flaps are positioned between the jet exit and the reversing bucket - you can easily turn under quite a bit of power in a boat length. However, since there's no decent sized rudder, a jet boat can tend to be less directionally stable at low speeds with continuous large corrections being required.
Jet boats draw very little water - we can get into 0.5m of water with an 8.5m rib.
Jets have no external props to they're inherantly swimmer safe.
A jet will cavitate if the boat flys and hence will give no immediate drive when it hits the water again.
On our Castoldi, the impeller bearings are water lubricated therefore they will be damaged if the drive is operated out of water.
Driving a jet takes a little getting used to - stearing in reverse is the opposite of a prop boat.
The main problems we have had are oil leaks which sometimes are a real pig to track down. The performance will also suffer if the impellor is damaged by driving over shallows. The edges need to remain sharp and can be damaged by small stones. It's a simple job to remove the impellor and resharpen though.