In my experience the rooms you get are just as good ; you are not treated any differently booking on points or with your own cash.
Many of the cards you may be thinking about will also give status at that chain so your point based night can easily be upgraded to a much better room than you booked in addition to benefits such as late checkout, free breakfast, free internet ; depending on the chain. Some chains waive resort fees and other type charges for point stays as well as taxes.
That said, in terms of getting a good value for your points ; at least with my experiences with Hilton ; the point redemptions are often best to use at the more luxury properties or the least inexpensive properties. The $150-$250 range in most cases do not provide the best point values and generally are better to book with $$$. Unless you have points to burn and do not personally associate an internal value to them.

The biggest downside I have found is availability for points is not always a given if you are trying to book properties that are a good points value ; it takes patience, time, planning maybe even sometimes luck to get exactly what you want and that would not be good for everyone.
Related some of the offers are hard to actually take advantage of: for example Hilton has if booked on points pay for 4 nights, stay for 5 but many properties will make their calendars such that actually finding 5 nights in a row at the base award rate is near impossible.
I cannot say if other chains play similar games but these are the things that the various websites making money on advertising links do not do a good job disclosing.