The paleo diet is, I think, 99% bullshit combined with 1% right-for-the-wrong-reasons. That 1% does make it worth a look, though, and I personally have lost about 15 lb in the last twelve weeks by (more or less) following it. My BMI is down from 27.4 to 25.7, and I fully expect to get back into ideal weight range within another month or so.
I went into it extremely skeptical of almost all the claims, but what I did buy was the claim that you feel a lot more full after eating a meal of meat and vegetables than you do after a meal rich in grains and potatoes. So I tried it, and lo and behold I find it quite easy to eat as much as I feel like of all the allowed foods and still consume only ~2000 calories a day.
I also find that I no longer have any craving for anything sweeter than fruit, whereas I used to be able to talk myself into milkshakes and brownies with excessive frequency. I think it's a blood sugar effect -- all the food I eat is low in GI so I'm not getting the blood sugar spikes I used to. This effect might be specific to me personally, though.
The fact that the diet supposedly replicates what our distant ancestors ate is important only in that it at least guarantees that you're eating a subset of foods that are nutritionally sufficient.
Other side effects? None that I've noticed, neither good nor bad. It's possible I've felt a little bit more tired, but I can't be sure... and in any case that's not unexpected if you're maintaining a 500-calorie-a-day deficit.
I should also mention that I'm not quite strict paleo because I eat moderate amounts of dairy -- I'll be damned if I'm giving up milk in my coffee. Speaking of which, I'll be damned if I'm gonna give up coffee, which is also non-paleo. And I'm not one to panic if a salad happens to have croutons, or my fish happens to be crumbed. But breads, potatoes, sugar and beans/legumes are out (I don't buy the logic behind exclusion of beans, but I never really liked beans anyway).
In conclusion, it's not a miracle and it's not nearly as amazing as its most far-out proponents claim, but if you need to lose some weight it's worth trying out for a couple of weeks to see what happens (maybe your body chemistry is different to mine, so it might not work for you). If you don't need to lose weight I wouldn't recommend it, because frankly it's hard to eat enough paleo food to maintain weight while physically active. When I've lost enough I think I'll reintroduce grains at breakfast and maybe lunch but keep the paleo dinners.