I first tried SheepShaver last week when my MDD G4 wouldn't boot. I wanted to analyze some audio files with a NRT program I have, and after searching and not finding anything which would do it the same way on a modern system, I figured that it might take me less time to do it on my main OSX-Linux box.
Setup isn't too bad. It's easy if one already has Mac ROMs and OS on hand. The overhead is pretty huge on my i7 box - about 10% CPU idle to 50-100% when handling any user interaction. I doubt if it will be suitable for serious work/play, but it's handy enough if I need to quickly run an OS 9 utility and not want to set up one of my systems to do it (I don't have much room).
As for Chris' remarks above about it being useless for MIDI and audio - on MacOS it does audio straight away, but obviously not "pro audio". I did a few quick edits of 24-bit 48kHz sounds and it played fine through CoreAudio. The main problem with MIDI (besides that it would have horrendous timing) is that the project handles USB I/O by converting it all to ADB. And they assume that nearly all prospective MIDI users would be trying to use it with a USB interface. Fact is though that SheepShaver does have some vestigial serial I/O. BUT nobody has tried using it in recent memory. This part of the code has scarcely been maintained. Did it ever work? Does it now? If/when I can be arsed to try, I might hook up something relatively simple, like a printer or terminal and see if those work. Another more flexible option might be to code some sort of bridge, an abstraction layer which could appear as an OMS driver in the emulation, and act as a go-between with CoreMIDI. I wouldn't want to need to do anything tight with that setup, but it might be a workaround for SoundDiver, sample dumps, and such.
Also, I did have one program refuse to run because its copy protection didn't like how SheepShaver virtualizes HFS drives. That was Acousmographe 1.2, which complained that it needs to be installed to either a SCSI or IDE drive and finds neither. But to be fair, the program is a crap Windows port which runs poorly in the best case anyway.