It has a bunch of limitations. It doesn't support hardlinks, it doesn't track folders so empty folders don't show up/disappear, it doesn't sync file permissions, etc.

The developer is awesome but he seems to be going at this from "how can I make git more userfriendly" instead of "how can I implement a dropbox that just happens to use git". clearskies/btsync/syncthing won't inherit all the great git stuff (great versioning mostly) but they seem to be more on track to give a good user experience.