After some initial struggles (gentoo-user mailing list) I have managed to update to KDE4.2.
I will not say that this applies to everyone, nor will I make a sweeping statement like "KDE is back", but, KDE is back on my desktop and I'm reasonably happy with it!
I'm using a reasonably dated machine, AMD Athlon XP 2500, NVidia GeForce FX 5200 128MB and 640MB DDR333. Not the greatest machine, but after disabling all desktop effects, things are running quite smooth.
I decided to give the new Kickoff menu a go since KDE4.1.3. Although it's not what I am used to, it is still not something that will completely deter me from using KDE4. After all, if I really can't adapt, I can always go back to the classic style menu.
There is however a few things that I think could be improved. The first thing is adding shortcuts to the bottom panel. I always keep a few icons in my panel - konsole, the home folder and firefox at least. When I wish to add an icon to the panel , the widgets need to be unlocked. I feel that even when the widgets are locked, you should still be able to add icons to the panel. Having different context menus depending on the locked status of the widgets are a big confusing. For me the main advantage of locking the widgets is the absence of that configuration bar next to desktop applets. But, this is also no show stopper, I only need to add shortcuts for my favourite applications once.
Another thing didn't work that great was Okular. I opened "Learning CMake", but it was painfully slow. I haven't had time to test it with another PDF reader like xpdf or kpdf, so maybe it's just the PDF document?
But overall I'm impressed with KDE4.2. From now on this will most definitely be my default desktop!