Great lens. Its mounted on my 400D most of the time unless i'm shooting prime or wide (28mm on a 1.6x isn't good for wide angle).
The IS and USM are extremely pleasant. The IS is rated at 3 stops, but conservatively I would give it about 2 1/2 at 28mm and 2 at 135mm. I have gotten sharp photos at 1/20s at 135mm before. AF is fast and accurate. The lens does hunt in low light, and this is to be expected since it is a variable aperture at f/3.5 to f/5.6
Sharpness wise, it hits the sweet spot at f/8 for everything between 28mm to 135mm. But at 28mm and f/3.5 it is quite sharp wide open with centre sharpness very pleasing. Corner sharpness isn't too shabby if you're using a 1.6x crop camera since the 'bad edges' are cropped out. Nothing near L quality of course, but sharp images nonetheless and extremely useable.
I find the focal length range an excellent one for street and walkaround photography. It's not a very heavy lens and the build quality is respectable. This lens really shines when its nice and sunny. Contrast given by the lens is pleasant and the colours are also warmer as compared to the EF-S 18-55mm f/3.5-5.6 II kit lens.
The cons:
-You lose out on the wide end when using this lens: if you find yourself shooting at 18mm often, I recommend the EF-S 17-85mm f/4-5.6 IS USM instead, or even the new EF-S 18-55mm f/3.5-5.6 IS lens (which I sold away my old kit lens and bought to complement my 28-135). An ideal lens that would complement this would be the EF-S 10-22mm (still saving >.<)
-Depending on the copy you get, there might be some zoom creep. There isn't a zoom lock (in fact Canon should really really really think about giving us a zoom lock for their zoom lenses).
-Doesn't come with the hood: this isn't exactly a con, but the hood will cost you another 50-60 dollars. The lens is quite prone to lens flare under strong sunlight but I don't find lens flare popping up in my photos often enough for me to dish out another 50 buckeroos for a piece of plastic with Canon's name.
FYI, I got mine at S$450 at ClubSNAP's Buy/Sell.
Hope this helps.
Cheers.