I've used it. Yes, they pay, and they're pretty good about investigating "missing" credit as well (when it happens). Ebates is also good, as mrthrifty mentioned... you should pick whichever has the higher rebate, and if they're tied, pick which one you like better. When shopping, I pick between Fatwallet, Ebates, uPromise, Citi Dividend Merchant Network, and occasionally MyPoints or Memolink, depending on which one gives the highest rebate (and they do differ a bit on most merchants).

BTW, FatWallet pays via PayPal regardless of how much you have in your account (no minimum required for PayPal; $10 minimum for checks), and you also get a one-time bonus of $5 after your first $5 in earnings.