I actually used Lending Tree when I bought my first house last November. I think it worked well. Most of the local banks I dealt with were only offering fixed rate 30yr mortgages. I really wasn't looking for that, so I used Lending Tree.
I got a lot of offers for loans based on 5yr ARMS & 30yr Fixed. I ended up working with a Mortgage broker I found through Lending Tree. I got an excellent rate on a 5yr ARM, 4.x%. So my payment including ins./tax escrow is only 1,300 on a $215,000 house.
As long as you are willing to be a little unconventional in your approach then Lending Tree works. If you are a traditionalist, then stay away. Also, make sure you check out closing costs and fees not just IR. One company was giving me a great rate but the closing costs would have been $15 - 20k.