I've never owned one (see below for why), but I've heard from alot of people who have...
The basic read is:
Filtering:
They are very good filters from a filtering-crap-out-of-your-intake-air standpoint. They catch more than paper ones.
Performance:
They're great for high-performance vehicles with good exhaust systems where the intake filter may-be/is an impediment to air flow.
This is why I didn't have one on my now-dead 1991 Firebird. My care was a 305cid TBI (Throttle Body Injection) vehicle with really POOR factory intake, heads and exhaust. Thus, any potential improvement caused by the K&N would be nullified by the rest of the system, since the real 'restriction' is elsewhere.
However, on the car that I'm picking up tomorrow morning (1993 Trans Am, with a 350cid MPFI motor), I'll be putting one in as soon as the current filter gets dirty. Why? Because the 93 T/A has a much better intake/exhaust setup than my old 91' L03 'bird.
So to make a long story short, you will see some performance improvement if your car is tuned well enough (either from the factory (T/A, Corvette, Firehawk, Cobra, etc...), or by owner mods) that the filter is impeding intake air flow more than the other intake/exhaust components. If not, save the money and free up the flow of that exhaust/intake system...
For more K&N comments if you have an 80's-90's GM vehicle, see www.thirdgen.org. The site is dedicated to Firebirds & Camaros (hmm... now where would a Firebird nut get his car tech info???), but the membership often has advice on anything GM with a 2.4, 2.8, 3.4, 5.0, or 5.7L engine, and the various members have alot of K&N experience.