VFR on top

Australia is changing/rearranging its' airspace model to more closely
line-up with ICAO and also to be a _very_ close copy of the current
USA system.

Basically there will be a heck of a lot of class-E. (usually bottomed
at FL180, but in some areas down to A085).
Our radar coverage won't change much beyond the current (roughly) 200nm
band along the east and south coasts.


One of the new procedures is called 'VFR on top', whereby an IFR aircraft
can go into VMC at VFR levels and still receive traffic advisories
(but no seperation) from IFR or observed VFR traffic.

As I see it, the procedure seems odd to me, because the requesting IFR
aircraft loses the safety of being seperated by ATC.
So my questions are ;
Is 'VFR on top' used a lot in the USA ? In the rest of the world ?
What practical advantages are there from a pilots' POV ?