There are some wrinkles, but in the main I think the project is making significant progress on making the whole thing work well for both admins of the hosted server and riot-web, and people signing up to and using the network with Riot.
Key management and verification needs the most work in Riot (even the redesigned client), especially for secure channels. That’s the biggest point of friction for me and my friends so far.
I’m very much looking forward to what Matrix can do as a network, and what both rich clients like Riot, combined with esoteric clients that do strange and wonderful things, can enable.