First problem was that projects had to be large enough to completely consume the entire time of those involved, because only the most expensive software could allocate one person among projects. Since the software could not work with multiple conclusions you couldn't combine projects on the same spread either. This resulted in not being able to reconsile time conflicts.
MS Project can divide people between project, not real gracefully but MS Project doesn't do anything gracefully. I'm not 100% sure about the second since I don't build or maintain the project plans but I don't think it can.
Second, it was very tedious to set up and maintain, and if not maintained, it was worthless (as a project manager - see below). This means the project must be large enough for someone to be assigned to maintaining the plan as a priority task. The only people I saw actually using project managment software as such were those on contracts that required it.
Setting up a project in MS project is a pain, but maintaining it is mearly annoying. As long as the database doesn't get corrupted which has happened to us several times over the past year.
Also, I need to mention that Project Central, the web client for MS Project has one of the worst interfaces I have ever seen. It is both ugly and clumsy.
Jay