DPP does a great job with the RAW files. Arguably it's the best quality canon raw converter out there. The thing is, imho:
1. It's sharpening isn't quite as good as what's available in lightroom/ACR with the detail and masking features. However, for most lower-noise photos the new unsharp mask feature makes it very close or arguably as good, depending on the photo, etc. I find that in low ISO low-noise landscape photos, DPP is often the converter I choose to use, with a faithful (I like faithful better than neutral for outdoor photos usually) preset. The canon lens corrections usually work perfectly. For photos with my Tokina lens that need CA removal, it's always adobe camera raw for me, since DPP won't lens-correct it. Also, I find that in some mid-ISO photos, ACR does a more pleasing "organic" job with them than DPP does.
2. The luminance noise reduction in DPP isn't very good. For lower ISO images it does a *great* job on 1 or 2 strength, kills some of the tiny grain in some places without hurting detail at all. Above that, it doesn't work very well and if your image needs luma NR, lightroom 3/ACR is better (or a real 3rd party tool). Chroma noise reduction works very well, maybe not quite as good as lightroom 3, but damn good.