We've taken on Kaleidos thanks to a subsidised offering and we're now tied into it for several years I believe.
It's alright, nothing spectacular though. On the plus side, it's very intuitive and I don't think anyone can argue that it's difficult to use, either as a staff member creating content or as a pupil navigating. However it has a major flaw - Speed. If you've got a slow or unreliable connection, forget it. We're running a 2Mb connection due to costs of upgrading and it's very sluggish with just a handful of users, so getting an entire class on is going to be a no-no for the time being which is a big limiting factor. It seems reasonably responsive from home on my 8Mb broadband so it would probably be acceptable in schools with a half-decent connection.
The other problem is that student's logins are generated, meaning that we have no control over them. Ideally, we'd have liked something tied into AD so we could stick with a single set of login credentials for ease but again it's just another niggle and another set of passwords to constantly have to change.
I know that somebody mentioned in-house solutions like Frog can be used even if the Internet is down, and whilst that's obviously true, the same applies in reverse - Nobody can access it from home if the connection is down. Yes, I like services to be available in school, though it's important that VLE's can be accessed from anywhere, so again a lot rides on the quality of your connection.