IAMA former Rosetta Stone employee who speaks 8 languages, AMAA.
I worked for RS for years, and have used their programs in versions 2, 3, and 4 for 7 foreign languages. I know which of their programs work, which don't, and why.
I have invited a few other former employees to join me here, and will update with their usernames so you can keep an eye out for their responses
The obvious questions:
does it work? - Yes and no, it really depends on the language in question. Some languages (French, Spanish, Italian, Portuguese, German, Chinese, English...) it works very well, others (Arabic, Turkish, Japanese) it is a very flawed endeavor, but may still be a useful tool, depending on the person.
Did you really learn 7 foreign languages with RS? - Yes and no; for some it was my primary method of acquisition, for others it was a great tool, and for others it was apparently an impediment to my success. I'm certified in 2 of the 7. I have former colleagues who I'm friend with who speak 5-10 languages each, and there are others who spent years with RS and just didn't bother to learn anything.
Adults don't learn like children, WTF is with their advertising? - It's advertising. Some people subscribe to the "critical period" hypothesis and would argue kids learn better than adults could ever hope to, others will point out that 5 year olds are complete fucking idiots and that any adult who spoke at the level of a 5 year old after 5 years of study should be ridiculed for their incompetence in language learning. Both are kind of irrelevant, in that RS is just trying to get people to buy a program that's built around a different framework, using popular ideas about linguistics.
EDIT 2: OtherRSguy and Zingerone are with me. I've asked them to contribute.
EDIT 3: Front page? You guys. Seriously...more Karma on my throwaway in one day than in 2 years on my real account.
EDIT 4: CTRL+F, people. We've already answered our thoughts on Russian, Mandarin, German, etc. a few times. My fingers are starting to hurt. My eyes are burning. I'm kinda freakin' out.
Edit 5: basslinguist is with me. What he says goes.