I recently purchased a gen-u-ine USGI M261 AR-15 22LR Conversion listed in the EE, and finally had a chance to take it out of a test run.  Bottom Line Up Front:  WOW!  300 rounds of chocolaty goodness as fast as I could pull the trigger, and no ammo angst about the cost!  My BlackDog Mags - well, not so much, but they'll get there.

Details:

Weapon: Bushmaster lower/Delton M4 Flat-Top upper (1:9)
Ammo: Federal Bulk Pack (325 round) and Remington "Gold Tip" in the 50 round yellow and green box
M261: USGI, and after I got it, I had it coated with Black Teflon by Lee Mecham at Black Ice Coatings  Can't say enough about Lee's work and customer service.
Mags:  M261 inserts (3) in USGI 20 round mags and 2 Black Dog Machine Gen II M261 mags (smoke)

When I got the M261, it was in excellent shape, although the finish was a bit worn.  I elected to have it Black Teflon coated for its amazing lubricating properties. Lee did a great job (2 M261s and 6 mag inserts, $65 including return shipping).  It looks brand new, and the thing feels like it's going to squirt out of my hands.

Although I have TM 9-6920-363-12&P, and I'm usually an unerring instruction-reader, I figured "How tough can this be?"  Slid the AR bolt/carrier out, and the M261 body slid into the upper without incident.  Obvious which way is "up."  The M261 inserts loaded easily and locked into the mags without issue.  (I had the inserts coated at the same time as the M261 itself).  Mag in, charging handle back and release, BANG, BANG, BANG.  What could be easier?  I had one misfeed in some 350 rounds, and that was a bad Federal round where the bullet was actually cockeyed in the casing.  I was shooting (1x Aimpoint) at the rimfire silhouettes at the 75 and 100 yard range, as well as the 8" swinger plate at 100 yards, and I was 'pinging' unless I honked the trigger.  Certainly not DCM rifle substitute, but for general "tactical" banging, it is more than accurate enough.  The M261 insert/USGI mags lock in and drop free just like real mags.

The BDM mags look good, and load (relatively) easily.  They both lock into the lower without a problem, and drop free, but will not lock into the weapon with the upper/lower assembled.  Repeated firm smacks on the bottom of the mag would not get it to seat.  The BDM M261 mag thread above makes reference to shaving some portion of the mag to get it to fit, but only in a generic sense, i.e. "I filed the tops down as instructed by BDM to get them to fit," and "I removed material from front/rear of the top of the mag as directed," vice specific "file here and here," so I need to do some additional research to find out how to mod the mags to get them to lock in place.

After shooting, I blew a few 5.56 rounds through the gun to clean out the gas tube.  After removal, the M261 cleaned up with just a cloth.  All that nasty residue just wiped away with a terrycloth rag.  Love that coating.

I hesitated to get a .22 conversion, because I thought it would be more about fixin'  than shootin'.  Not even close.  No worries about finding those last 7 pieces of brass, or of shooting ammo at $.35 per trigger pull.  If you don't have a .22 conversion, you don't know what you're missing.

Good review, I can't wait to shoot mine.

They are great kit. I got mine a few years back with 5 mags. If you zero your gun for the 22 you need to rezero it when shooting 223

Quoted: They are great kit. I got mine a few years back with 5 mags. If you zero your gun for the 22 you need to rezero it when shooting 223

I have two optics, and I use the Aimpoint knock-off for the .22, and then just swap back when I'm done.

Now, if I can just figure out how to get the darn BDM mags to lock in...

Very Good Writeup. I have a couple newer Olympic 261 Conversions and have most of the bugs worked out. They aren't quite as accurate as the Cieners but more than acceptable for the intended purpose. Every rifle is a little different as far as fit. I have swapped my conversion units around, trying them in over a dozen different Rifle combinations. I've found that some of the rifles are way more accurate with a specific conversion unit than others. Now once I find a good combination, I leave it dedicated to that conversion unit. I have one rifle that was made as a Frankenstiener. It's made up completely of Spare Parts. Best shooting and most Accurate Rifle/Conversion I own, Go Figure.
Good Luck finding the fix for the BDM Mags, once you do, they work great.
Shoot, Shoot and Shoot Some More.
22 Conversions are the Ultimate Blast.
SO-13