Bought Rocksmith last week and really enjoying it. I've had an Epiphone Les Paul Custom lying around for years and I think it's finally time to learn how to actually play that thing. I've been playing bass guitar for ten years now and studied a little bit of music a few years ago so I'm not a total beginner. I second not getting a cheap guitar - cheap instruments a such a hassle that they want you to stop playing music altogether.
Playing through Sony's own stereo headset and experiencing a little bit of latency, but not enough to not being able to adjust to it. The bass expansion (which was included in the PAL version and... is free dl in NA?) is also pretty good. I especially liked how my Warwick Corvette STD sounded through all the digital filters. You can also use a regular guitar to emulate bass, but I think doing that is just silly. Overall Rocksmith is great if you're starting to learn an instrument and want some training motivation.