I directly reported to a manager, who in theory, was responsible for my performance/etc. It was his job to play the "good cop" unless I was really fucking up.
However, on a day-to-day basis I was reporting to a project lead (IT Director for an OpCo) for all practical purposes for the duration of the project I was on. "Bad cop".
In theory, this structure is good for the employee if your homeroom is willing to call BS on the guy running the project. You end up with 2-3 managers evaluating you (depending on scale/# of projects) rather than 1 which can help even things out to "fair".
However, if you are in my situation (direct report to CTO) vs. (home room, who is far down on the ladder relatively speaking)...the home room manager ends up protecting himself/career and doesn't push back. So you end up (for all practical purposes) being a direct report to the project lead until the project is done.
On the whole, its a better management structure than most places and as long as you don't end up on a bad project it greatly reduces problems.
If you end up on a bad project with a bad manager well...it really depends if your home room will defend you or not. 50/50 shot at protection is better than the 0% you get at most places.