I got this about a month ago when Woot was selling it directly via Amazon.com for $220. That was a great deal -- this is even better.
I'm a technology journalist/recovering audiophile/gadget junkie so I'll try to answer some questions:
1. How well does the AirPlay work?
In my experience, it's flawless. It may end up having to do with your WiFi setup and what version of iOS you're using. With the latest versions of iOS 6 and OS X, I have had zero drop-outs.
The configuration is dead-simple and you can send 99% of music/video apps from iOS directly to the speaker using AirPlay. There are a few apps that don't work with AirPlay, but all the major music services (Spotify, Pandora, Rdio, Slacker) work.
This also works really well with the Apple TV if you want to stream music off of your collection that way or use it as a soundbar with your TV that way.
There was a firmware back in October 2011 and on my unit, it had already been applied -- but check to see if it's loaded. Updating the firmware is very simple and Klipsch has a whole page showing how to do it cross-platform http://resource.klipsch.com/Education/faqs/g-17-air-faq/g-17-air-update.htm
2. Sound Quality
When I first saw the G-17 at a Klipsch event in New York City, I was really, really impressed with its sound. It was a busy room with lots of people and the speaker still managed to put out the sound to fill the space.
Like all Klipsch products, this isn't for heavy, bumping bass -- though it does a good job with bass -- but the sound is really ideal for a flat listening experience. This is what I tend to prefer and the highs and mids are really, really lovely.
I tested the G-17 against the Bowers and Wilkins Zeppelin Air and the Altec Lansing that are in the same MSRP range and the Klipsch was my favorite.
In short, this sounds like a $550 speaker -- which is the MSRP. Back in 2011, the $550 was too much for me to pay but at $200, that's a different ball game.
3. Other Uses - Klipsch doesn't advertise this but the speaker actually supports DLNA so if you have a DLNA device or app on your Android tablet, that works with this quite well. Moreover, there are a lot of AirPlay apps on Google Play that I've tested with this unit without issue. That said, AirPlay is an Apple technology and this is really designed for the Apple user. In my house we have an iMac, a MacBook Air, a MacBook Pro, iPad, iPad mini, two iPhone smartphones and two Apple TV devices. My experience is that of someone who is deeply embedded in the Apple ecosystem.
As for using it as a soundbar -- you can, but the results aren't totally ideal. You can use an RCAP to 3.5mm adaptor and that works, but the sound isn't as good as if it were straight analog or coming from an optical out.
Having said that, it works really well with the Apple TV and the DLNA on my Blu-ray player (Sony), which makes it a nice option for movies and music that way.