IS...it's a great feature. If you can afford an IS lens, I highly recommend it.
IS fights against camera shake. The rule of thumb is that to avoid camera shake blur, you should use a shutter speed that is 1/the focal length of the lens. So for a 200mm lens, you would want a 1/200 shutter speed. Many people also say that the crop factor of most DSLR cameras should be taken into account. So for a 200mm lens, you would want a 1/320 shutter speed.
IS gives you the ability to shoot at slower speeds without the associated camera shake blur. Canon says that you can expect up to three or four stops with their newer IS technology. Realistically, it's more like two or three stops....but at three stops...you can get sharp shots with a 200mm lens at 1/40...maybe slower. That's pretty freaking good.
Following this logic, IS is much more beneficial on longer lenses than it is on shorter lenses. I've used a 100-400mm lens with IS...and when you are looking through the viewfinder and you activate the IS...the difference is amazing.
Now...all that being said, IS will not help to freeze subject movement. It's all well and good that you can get sharp shots at 1/40 or 1/15...but if your subject is moving...then you will still get blur. Only a faster shutter speed will freeze both camera shake blur and subject movement blur. So if your intention is to shoot sporting events or kids running around...IS will help but it won't be a miracle cure.
Bottom line...if you can afford it, get it...you won't regret it.