1. degree of difficulty re the layout process, using their software
I did one book with them. The pictures came from my Fuji P/S. Using their software and service is extremely easy. Download it and try it out. You basically just point the software toward your images, pick your layout, and then drag them in.
When I first started out I used their software and was pretty happy. However, I found the templates to be too restrictive and not what I wanted, so I just created a two page layout template in Gimp, arranged my images and text as I wanted, and then cut the pages and added them to Blurb as my images. The nice thing about doing it this way is you get have images of every page of your book (independent of Blurb software). If you name them to go in order then you can just load it to blurb and then auto fill the pages.
And using full bleed doesn't have to result in losing any of your image (or at least you can limit it). Just create a template with edge guides for the crop. Iirc, Blurb doesn't give exact dimensions for the crop. I used this
guide to create my template and things turned out perfect. You can
see her book, and she also has some info about how to use the templates.
2. success relative to matching your photos (color and B&W)
I didn't calibrate or anything. I just took the plunge. I'm guessing I got lucky and everything turned out just fine. All my photos were color.
3. overall quality; paper, printing, binding
I ordered my book with imagewrap and the premium paper. I was extremely happy with the heavy paper and the quality of the print. The binding was extremely stiff and I was a bit concerned about it, but we've had it for 3 months and it's had no problems. It's just a photo album of a family trip and it's been heavily used by friends, family, and our two small children, but it has held up just fine.
4. anything else
Unless something better comes along for the price, I definitely will and plan to use them again.
If I did it again I wouldn't waste my time using Blurb's templates. In my book I had to redo 30 pages I'd done in Blurb, but it was a good learning experience.