I've used it before, and it has it's usage, but I find it's best usage comes in combination with other things.
For example (by itself), if a band has a building surge that just sounds out of place on the recording I can use the envelope tool to do a gradual fade for a few db. I've used it to do gradual transitions (instead of straight fades, do sort of an adjustable logarithmic fade) between sources when patching. For audience applause (using it among others), when I used audacity I'd figure out what the peak of the music nearby is, and what the peak of the applause is, divide that by 2 and thats what I use on the envelope. The reason is when you use the envelope you decrease the background as well. One or two DB isn't bad, but more then that and I noticed the transition. So I'd do half of it with an envelope and the other half with the hard limiter. I didn't want to favor either tool exclusively since when you really use them they can be noticeable on playback, but if I used a little from A and a little from B, I found the overall result to be better than either alone.