It does work on the n66u so it really saves the hassle of doing a wireless scan every now and then to find the least congested channel. Maybe the more recent wireless socs and drivers are finally putting their act together.
Here is the scenario for cons of auto-channeling in a very crowded WLANs environment:
Router A to L are enabled with auto-channeling and all other routers M to Z are on static channels spread across 2.4GHz available channels.
Background: In the evening/night hours when most households are occupied and its residents are accessing internet.
As usage are usually sporadic (momentarily), some channels will get utilization surges while some channels are less utilized. Let's say router A detects its channel 9 is congested with interference and change to channel 1. During the change, there is short lag/gap before the client devices also switch to channel 1. This itself may disrupt existing use(s) on the client devices - dependent on the type of use. Surfing is fine, file downloads/torrent is quite alright, but gaming (live traffic multi-player) may be badly affected.
Let's say router B originally being on channel 1 detects the congestion after router A's channel switch, it starts to look for a less congested and toggle to channel 3. The cycle goes on and on with all the routers A-L.
In a crowded environment where 30-50% of the routers are using auto-channeling, it can be quite disruptive and also affects users' experience on their usage (depending on what they use/doing) of the internet connection.
Most non-IT savvy users will have an impression that the ISP's connection is lousy, spikey, etc. Some to the extend of complaining in forums and logging calls to ISP's helpdesk even for the tiniest bit of lag/pause that is caused by their WiFi switching channel.
Summary:
The auto-channeling feature is good if users have high tolerance level and their usage is not sensitive.