I JUST finished a quilt this way this morning to try it out. It looks like Kate described the process exactly the way I did it, and it turned out pretty nicely. Like she said though, the corners aren't quite a nice; they're OK, but are a little bulkier. I didn't have any trouble getting it to lay flat using a walking foot. I chose to use this method on this particular quilt because I didn't have enough of the backing material left to cut a regular binding and I wanted to use that fabric.
All-in-all, it was a little "easier" than a french fold binding and I machine stitched it, so no hand work except for a little basting at each corner to make sure they were good before I stitched it down by machine. It's definitely quicker, but does take some careful trimming and preparation of the backing/binding and the batting.
I'll probably use this method occasionally, but I prefer a french fold or piped binding on my really "good" quilts.