It's hit and miss. I like the idea, but the execution -most of the time- sucks so hard that I just hate going through it.
City of Heroes is one of the few games in which I enjoyed creating my own character. It allowed a great degree of customization that looked good.
Dragon Age left a lot to be desired, but was decent enough. Although all of my characters came out with dark skin, black hair, and bent noses. It was especially hilarious with the human origin, as I would always just pretend I was an illegitimate child and the Arl was just in denial.
Demon's Souls and Fallout 3 both had horrible character creation. KoToR was just awful. If you played a dark-side jedi, you had to deal with a week-dead walking corpse. Veins through the face, hair with no luster, flat eyes. I hated it.
Another bad one was WoW. It had ten faces per race/sex, two of them were good, eight were absolute crap. Female dwarves are rare? Try a female human with a hag's face. Then you had the ludicrous models with no scaling. All male NE were gorillas, and none had the option of the Cenarius-style beard like on all the damn box art(apparently straight razors are the number one import among male night elves ever since the humans arrived.) All human males were ripped, all the girls had huge busts, and then the blood elves were pro-ana sticks.
And then there was Mass Effect. Omaigawd that game had horrid character creation. I just stuck with generic Male/Female Shepard because the second you touch the slider, you get a fish person. Do people in the future not use shampoo at all? That shiny hair looks like grease, tone it down, Bioware, it's disgusting.