For the most part, this plugin is indispensable. WordPress's insistance on using absolute URLs for everything is my one least-favorite "feature" (it makes it very difficult to develop, stage, and deploy across multiple domains).
I've noticed one problem with WordPress 3.5's new media manager, however - when adding items from the media library to a post, and using the "custom url" feature, the custom URL will be completely stripped and must be entered again manually in HTML/TEXT view.
This is a problem because it can "break" image links for non-technical admin users. Adding an image link that points to another domain will be broken every time, as the href value is empty.
Fix that, and this goes back to being 5 stars! :-)