bluester, I have 6w warm white MR16 lamps in all of my downlights in my place. Their light output is roughly similar to about a 35 watt halogen, both in intensity and colour. They are perfect for rooms where you don't need a bright light such as lounge rooms, hallways, toilets, bedrooms, patios and in garden lighting etc. I would not use them in a kitchen, bathroom or laundry. They run off 12 volts AC, and work best from iron core transformers.
in saying that, most of the well known commercial lighting brands such as pierlite, zumtobel, JSB, etc have used LED technology and have come up with very good commercial quality fittings. It has been a very rapid evolution which has seen LED downlights new being par for the course in commercial fitouts in offices, hospitals, universities etc (the only people who can afford it...) They are very expensive to buy, but more importantly is the cost of ownership, which takes into account energy usage and lamp replacement. In terms of cost of ownership, the LED technology kicks arse over incandescent or even compact fluorescent luminaires. In residential applications, cost of ownership is not a big of an issue because lights are only on for a couple of hours a day, not on for 16-24 hours like in a commercial situation.
Pierlite have recently launched a 12 watt warm white LED downlight kit, which looks exactly like your everyday halogen downlight kit and the light output is comparable or better. They come complete with fitting, lamp, power supply and flex and plug. They cost around $85 trade, or about $110 or so retail. Very impressive fittings and are now widely used (we are putting in approx 600 of these in a job we are doing).