This is a standard plugin which can improve usability if applied correctly. It is key not to include too many tags, so the tag cloud doesn't get crowded. The animation is smooth and not detrimental to overall performance.
It doesn't work with Cyrillic signs out of the box, but a simple change of the encoding can fix that issue. It would be still great if the author could include that fix to any upcoming updates.
The plugin is of course Flash-based and doesn't work on mobile devices. A fallback text-only option is provided. Unfortunately no visual CSS-only alternative in the same quality and smoothness exists yet, even though it would be very welcome!