I use it all the time these days, where it's available. It's far easier for me to pop into argos on the way home from work than it is to have to wait another 24 hours to drive to the collection office because nobody was at home to collect the parcel (why does the post have to come during the working day? Be far better if the postman came at 5-6pm!).
It's very easy for the seller - it works in the same way they'd send any parcel, they just get given the address of the argos store and a reference number as part of the address.
If you can get your email on your phone (although I think they can text you details), it's so handy. Walk straight up to the collection desk with your email opened up, they usually see you straight away (although as it gets more popular I can't see this staying the same forever), walk out a couple of minutes later.
Not only is it very convenient, it also saves your parcel being subjected to the likes of...
etc etc etc.
The only bad thing about it is the slight feeling of guilt when you're walking past the 40 or so other people who've bought things in the store and are waiting, so you can pick up your £2 pack of plastic zip-lock bags!
I'm surprised Argos haven't attached a small surcharge to the delivery cost, although clearly what they're trying to do is get people in the store in the hope that they'll buy more things whilst they're there.