Having just returned from doing this very drive I thought I'd bump up the thread with my experience.
-Make sure you properly bond the vehicle if it's a US vehicle. The free-zone ends after Ensenada.
-I'm guessing that the total drive time is about 23 hours (San Diego-Cabo San Lucas). Going over 70 mph is difficult if not suicidal, although there are plenty of maniacs doing 85-90
-We stopped in Catavina, Playa Santispac (near Mulege), and La Paz which we felt broke up the drive nicely, although you could get to Guerrero Negro from San Diego in one very-long day
-Driving at night-time should only be done in case of emergency because of animals wandering the roads (we saw mostly goats, but many a dog and a rogue cow alongside the road can be expected)
-No road bandits whatsoever, however there are certainly many military checkpoints (we passed through 6) where a few brief questions and/or wave-through can be expected if you're headed south, unless you're in an RV or semi
-The very narrow 2 lane highway with no shoulders gets twisty and windy and can be absolutely harrowing in a few places where there are no guardrails, and it can be absolutely maddening to be stuck behind semis going about 10 mph up long hills. Luckily the semi drivers are courteous and signal for you when it's safe to pass even in curvy areas (you have to remember you're relying on their viewpoint, so pass at your own risk). There is no law in Mexico requiring drivers to pull over after so many cars piling up behind them---however many will signal the safe-to-pass like the semis do. The indication for clear to pass is done by turning on the left-turn signals and leaving them on, which could mean disaster if the driver is really turning left. The difference is fairly obvious where there is no place to turn left, but watch out nonetheless. Likewise, if somebody is tailgating you (and there will be somebody for sure), if you can see it's completely clear ahead, signal for them as well.
-Other than a few dusty towns, the first interesting town after Ensenada is probably Mulege', then Loreto, then La Paz and finally the Todos Santos area and then Cabo San Lucas itself. Guerrero Negro is for the whale watchers--skip it otherwise (in fact, if you don't take the turn into it, you'll pass right by and think it's just another dusty town with a Pemex and a few houses)
-Don't expect to see the beautiful coastline for the whole drive...70% of the highway is nothing as far as the eye can see, 20% is mountain climbing and descending, and the rest gives glimpses of both coasts. Likewise don't expect to be able to pull over and run to stick your feet in the water--you won't be able to
-There was only one long stretch (200 miles?) in the Catavina area with no gasoline availability. I'm told diesel availability can be spotty
-Road conditions were for the most part good to fair, with only a few constructions spots requiring driving on gravel for a few miles at a time. 4 wheel drive not necessary but could be helpful especially if you're camping or drive on the beaches