My brother hasn't started his kit yet, he's saving it for a winter project. I opened up the package when it arrived, and the woods looked top notch. Way better than the usual uke you see for $100, which is what the kit cost.
I noticed in the new Stew Mac catalog they are now offering a larger tenor uke (as opposed to the "normal" sized soprano like I got for him.) I have a strong urge to get that tenor kit. There's also an F5 mandolin kit I am lusting after, but its significantly more cash, so I suppose its best to start with the uke to be sure its within my skill level.
From my research, the guitar kits can produce a very high quality instrument. There are testimonials from pro luthiers who said that they were able to sell their kit-assembled guitar for several thousand dollars. Its similar to what we see with Warmoth--a careful job and some shop skills can yield a fine heirloom, but you also see plenty of unfinished "project" Warmoths on ebay from people who couldn't get it done. I believe I read of one luthier who financed a workshop by selling a few completed kit guitars before moving into scratch building. Or maybe that was a suggestion, but still, thats what they say about the quality of the kits.
The LMI website seems to be geared more towards the professional. They allow you to change any aspect of the kit, upgrading woods to whatever you want. Since its a luthiers supply company, presumably thats one place where you'd be getting the wood anyways, even if you were scratch building.
Like anything else, if its approached as a fun project and learning experience, then the price paid seems very worth it. If you're looking for a collectible investment, it might be better to speak with George Gruhn to invest the money. Woodworking skills are probably even more important than in building a solidbody, and it might take a few more specialized tools or a good dose of ingenuity.
Winters coming!