How I Use It
I think of this less as a product for students (though it can be) than as one for teachers to use to create content for their students. I found it great for creating content that is engaging and accessible for my students. What I mean by that is that iBooks Author lets you take content might by either too complex or less engaging for your students and make it better. Since I work with special needs students I was very happy that I could take grade level content (i.e. high school U.S. Geography) and convert it to their level and make it more visually appealing (interactive pictures, videos, 3D models, quizzes, and more). I have had higher level students use it to create their own content books with interactives which they found more appealing than a basic essay.
I really like iBooks Author, but it does require a fair amount of up-front effort if you are creating content for your students. What's great though is that you can hook an iPad up to your computer and test out your ebooks before actually finalizing them in case you weren't sure how a finished product would function. As for whether you should use it for creating student content, it depends on your students. It functions almost identical to any other document editing software with some additional instruction required to show students about the interactive features.