Some say they are the greatest things ever and a large proportion of organisations use them regularly for a variety of positions. I've also used them as a coach and also in coaching coaches (www.coaching-coaches.com). But the use and reliance on psychological testing and assessment is growing!
They are certainly useful and have their place in a range of different circumstances. For example, they can help managers and leaders hire a certain kind of person for a job that might require particular personality. However, in my opinion they are over used and really can't help recruiters predict everything about the potential performance of a prospective candidate. Employers rely too much on crunching their candidates and not enough on really getting to know them. Tests can be used as a supplement to in-depth interviews and other assessment procedures but should never be used as a substitute. This is insulting to both the candidate and to the whole process of recruitment, not to the mention the company.
As a coach I would always advise you to be cautious about using assessments and psychological tests of this kind unless they are used as part of an entire selection process. Also if you have to use them or be involved with them somehow check that the authors are reputable and that the tests themselves have been tested and authorised by a reputable body. I don't cover psychological tests in my guide at www.coaching-coaches.com as they are a whole new area in themselves but they are certainly something that executive coaches need to become more aware of.
Check my guide at www.coaching-coaches.com