First off, for those having a hard time downloading it, download it from the Add-ons section of the main SRB2 site, not from the official Mystic Realm site. That download link is broken for me too, but the one here on SRB2.org works just fine.
Anyway, I got to Flame Rift Zone 3. I had also played through Vulcan Forge Zone, which is extremely hard and frustrating. It wasn't until later that I realized it was a secret level. No wonder it was so hard.
As for my thoughts, so far I think there was a great job done here. The music has been replaced with tunes that are less repetitive, the levels were more streamlined and had most of the really cheap challenges removed, and overall I think it's much better. However, I hate the boss fight on Flame Rift Zone 3 - I hate having to fight Robotnik overtop of a hole or anything else that spells danger. I think THAT is a cheap challenge that Mystic Realm could do away with.
I cheated to beat Flame Rift Zone 3, so therefore with "modified game" status now on, I decided to just warp to every level to see what they looked like. I like the sheer amount of variety I see, along with the hidden levels. It looks like a ton of work was done here, and I look forward to going back and playing the mod legit again. The new hidden levels look like they're really rewarding to earn, as they're quite creative and different.
The only thing I'd change, is the Robotnik fights over holes and such - I just think that is a nasty, cheap type of challenge. The rest of the mod is great.