I've done 2 terms of it (instructor stopped doing it, or we would be still going) DC loved it, and I enjoyed it too - we both miss it. Good for socialisation.
Still use the CDs loads - the music is well-arranged and well-performed - but can seem a bit wacky - but then it's selected for american children (Kindermusik is a US franchise, not German as the name may suggest). Also, DC asks to see the books. Very occasionally you may find Kindermusik materials on ebay, but the instructor may insist on you buying through them.
Musically, the children may pick up some sense of rhythm - but probably not much tuning-wise. Instructor does sing some of the songs in the classes so that can vary a bit depending on who's doing it - and Kindermusik just asks for the instructor to be able to keep a tune, rather than any formal training. Quite a lot of recorded music used in our class. Lots of dancing around - which DC enjoyed hugely.
Going to a Kodály-based class now, which is much more like a formal music class - it's much clearer to the adults when the children are being taught pitch, and there is very clear teaching of rhythm too. It's all still fun for the children who don't realise they're learning. Kodály-based classes use very little recorded music. DC also loves this, it's a much quieter class and DC is thriving on being able to listen. Cheaper than Kindermusik.
Also did 'Musical Steps' (another franchise) which was partly Kodály-based. The instructor stopped doing these classes, too (it's not me, honest! 
). I found this a bit hit and miss - but DC loved it and asks to go back when we pass the venue. Our experience of 'Musical Steps' was a bit like the more formal music class, but with about a quarter of the kids running up and down shrieking behind the group. That probably depends a lot on the instructor, and the parents involved. Also, cheaper than Kindermusik