I'm a Xubuntu user (formerly Ubuntu) who has been running its OS on a 16 GB microSD card for about one and a half year, so I'll relate my experience.
The general experience is indeed slower than having the OS on a HDD, but not that slow. While I don't recommend it if you need top performance, I'd say the difference is negligible for the average use (web browsing, music, videos, office suite, basic multimedia edition). In fact, I switched from Ubuntu to Xubuntu to make the most of the limited hardware (XFCE is faster than Unity and GNOME).
In all this time the only reliability issue I have faced is when I accidentally move the microSD card and I/O errors show up. It frequently happened to me until I get used to have a microSD card near of my hand when typing, but it still ocassionally happens for external factors. The filesystem gets corrupted and I'm unable to boot normally as
fsck needs to be run manually, but such command has never failed me so I can use the system again in a couple of minutes. The worst part is to lose unsaved work, but it is not a big issue if you are used to constantly save the important things (and Firefox is really good when it comes to restore my tabs :'D). Please note that this issue may damage the card in the long term.
16 GB of storage capacity. The installation process left me with about 5-7 free GB. I only need a few more programs of what comes by default and I store most of my files on the cloud and external devices, so this free space is enough for my needs (but it may not be the same for you).
Install the OS on a HDD/SSD if you have the possibility or if you actually need top performance. Otherwise, installing it on a microSD card is a good choice.