When I first heard about the raid finder coming out in 4.3, I wrote a fairly cynical post summing up what I'd imagine this new feature to look like if it was exactly like the dungeon finder, only with more people. Since then more information about it has come to light, most importantly the fact that it will have a separate lockout on an easier difficulty setting, and I find that idea really interesting.
I still think that this feature will have a similar effect on the game as the dungeon finder in so far as it will be a smashing success in terms of numbers, because anyone can press the "queue" button and thus the number of people who have at least tried raiding in some form or another will go through the roof. However, I also believe that just like it happened to five-mans, the quality of the average raid group will plummet dramatically. We'll see what kind of long-term effect that will have on the game.
Anyway, the thing that really intrigues me is that I believe bloggers are interpreting Blizzard correctly as wanting this new raid finder to be a tool to teach people and encourage them to get into "real" raiding. If this is indeed something the developers are hoping for, I can only see them failing spectacularly.
First off, the teaching idea. Remember how at the start of Cataclysm, harder heroics were meant to be a stepping stone towards raiding? Well, it turns out that the average dungeon finder pug was totally overwhelmed by concepts such as having to use crowd control on most trash pulls and boss mechanics that could actually wipe you if you ignored them, so Blizzard had to nerf the content. In hindsight, I can even kind of understand why. Back when people formed their own groups for five-mans, it was easy to tell off whiners with lines such as "the difficulty is fine, you need to group with better players". However, if the expectation is that game mechanics will put together your party, then the developers are actually at least partly at fault whenever those groups don't succeed. It's just a shame that they seem to prefer the option of making bad teams viable to trying to actually create better groups.
Anyway, nowadays we're back to most heroics being AoE zergfests, and they teach people exactly nothing about good play. I'm pretty sure that this will be the inevitable fate of the looking for raid tool as well. Unless all bosses become more or less tank and spank, randomly formed groups consisting of people who don't want to talk to each other will fail. Players will complain about the fights being too hard for raid finder groups, they will be nerfed some more, and eventually they'll be about as instructive about normal mode boss mechanics as an AoE zerg is about using crowd control.
As for people feeling encouraged to get into "real" raiding, I don't think that this will happen either. In fact I'm pretty sure that the looking for raid functionality will be another blow to traditional raiding and decrease interest in it even further. Just wanting to see the boss, regardless of the details of the mechanics, is one of the major motivations to raid. If you can just get to see the boss event in easy LFR mode, why bother with all the extra hassle of being part of an organised raid group?
Better loot, eh? I don't think a few more ilevels will be enough to justify such a massive jump in investment for most people. I expect the whole thing to work similarly to the decline of 25-man guilds. Sure, those who are already doing it will keep going for a while, but fresh blood will become more and more rare as people are simply lacking another major incentive to make the jump to bigger groups/normal mode raiding.
Incidentally, I do wonder how exactly the looking for raid loot will work out and how it will compare to what you can get out of the new five-mans and valor points. Everyone knows that people gravitate towards wherever getting the loot is easiest, so I think that LFR and the dungeon finder being in competition with each other might become a bit of an issue.
More than anything I am curious to see how it will all work out, and I'll definitely hit that looking for raid button a few times once it comes out, just to see what it's like. However, on the whole I have to admit that I expect it to have more negative than positive effects on the game. Personally I just can't see the benefits of more people seeing the bosses outweighing the negative effects of the game gaining yet another incentive to play in crappy random groups.