Well..hehe...I use AVR's as well as picaxes. I have yet to be able to (not that I havn't tried) output video on a picaxe, implement a file system on a memory card with a picaxe (I've done raw writes, but not anything that winblows could actually read), Direct digital synthesis, serial comms at 115k, SPI at over 10mhz, the list goes on.
This is not to say that the picaxe isn't a real micro. Just look at it. It's a pic! It's just running an interpreted language, so you cant do the high speed things you could with an AVR. This limits it in some respects. On other fronts, however, I've saved myself an immesurable amount of time and money (because time is money) developing with picaxes. I've used even the lowly 08 (not M) to replace precious square inches of circuitry board space, jsut to do soemthing simple that otherwise would have taken alot of itme, effort, and design to do, all in less than 5 minutes.
Everything has it's place, and as long as you realize the limitations of the picaxe system, you can use it to your advantage to shatter the limitations you may have thought you were previously under.
As for reliability...I've fried one 08 in the two yers or so now I've been messing with these things. I pulled the +5 volt wire out to do a hard reset, and it fell across the +12 volt rail. No smoke, but no 08 anymore either. It's the only one, and Iv'e done some pretty stupid things with them.
As far as I'm concerned, anyone who is so ready to dismiss a picaxe as unreliable is either not experienced enough to know what went wrong, or is expecting too much. They're no more or less reliable than any other pic (since tha'ts what they are), and pics have been to space and back (some are even still up there and working fine!). If that's not a testament to reliability, I dont know what is.
--andy P