It works fine for a screen or two, at most.
I agree that it's common in file browsers, etc. My favorite file manager - File Commander - uses it in its Tree view. It works well when you can see the beginning and ending posts in the subthread. But without some other queue (color is a possibility) it doesn't provide much useful information if the display is more than a screen long. I think indentation works just as well in those cases, and it's less cluttered.
I haven't thought about this too deeply, but it seems to me that if too much information is on a screen, perhaps the HTML should include [link|http://en.wikipedia.org/wiki/Folding_editor|"folding"][1] of the subthreads. The issue with that, of course, is that the user then has to click to expand the subthreads.
I wouldn't veto the connecting line segments, but would like them to be a user-option that can be turned off.
My $0.02.
Cheers,
Scott.
[1] That [link|http://en.wikipedia.org/wiki/Mike_Cowlishaw|Mike Cowlishaw] (father of REXX) is an amazingly prolific fellow!