The service is way simpler than flagging down a regular taxicab, and only a small percentage more expensive.
From the iPhone app, you simply click the "Pick Me Up" button. The phone geo-locates you and tells you how long until your driver will be there. For us, it was a quick 2 minutes.
The driver pulled up in an all-black Mercedes and asked where I wanted to go. He has an iPhone app that talks to the Ubercab servers to determine how much your ride will cost. When we arrived, there was no exchange of funds, he simply said "have a nice day".
Less than 5 minutes later, I got an email for the receipt, which was just slightly more expensive than it would have been to ride in a regular taxi.
Ubercab is currently only in San Francisco, but expect other cities to pop up on the map in the next 30 days. If you are in the bay area, they are doing 50% off rides on Saturday.
Would you use this service? I think it's awesome because it's so convenient. You get what you pay for... you don't have to worry about talking to that creepy taxi driver, or worry about if the driver takes cards or not.
I will definitely use Ubercab in the future.