I'm pleased with Basecamp. Let me talk about it from both a project management perspective, and a customer perspective.

I like Basecamp because it doesn't assume much about a project. The definitions for give milestones and similar are arbitrary, and it is just as easy to lay out a "make a sandwich" example project as a "construct fission plant" project in terms of the software interface. Microsoft Project, in my experiences with it in the last few years in graduate school, wanted to do way, way too much. That was great for the fission plant project, but disorienting overkill for the sandwich project.

On balance, Microsoft Project would be a better choice for fission reactor class projects, because it is better at micromanaging very large project data sets. If that is similar to the nature of your project, then you've got your tool already. But if your projects tend to be a bit smaller in scope (not simple, but composed of tens or hundreds of steps, instead of hundreds of thousands), or a bit more esoteric in nature, Basecamp is a great product.

Basecamp's learning curve is very low, whereas Microsoft Project assumes you have been trained in Project Management AND the software itself. Basecamp will walk you through the basics, but even the complex tasks are made simple by a friendly and intuitive user interface. I find this more useful, because I spend much more time planning my project, and much less looking for "how" to enter specific data or perform particular actions.

Most of my projects, while not quite as small as the sandwich category, consist of things like all the steps to procuring, deploying and testing a new computer lab for students. That's well below fission reactor stage, but it usually gives me 15-20 milestones and a time-line of several weeks overall.

Basecamp is also good about sharing resources, and sharing information between groups, including customers. I've dealt with several companies (most notably a very good web design firm) that used Basecamp for their project management. The best part was that they included me as a customer. I don't think I saw every message they exchanged or every version of every file, but I saw not only the finished products, but some of the interim efforts and discussions to arrive at them. I was allowed to chime into these, to add information to them and make comments when I felt it appropriate. That meant less wasted time for them, and faster delivery of precisely what I wanted.

That was their option, they could have made it so I wasn't a part of the project, or could only see finalized files without discussions. But for smaller projects that you're closer to, the ability to integrate clients into the process is valuable, I very definitely found it so as a client.
Source(s):
Personal experience with Microsoft Project and Basecamp. Successful project completion (internal, and as customer) using Basecamp.

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