In the few cases I've experienced (locally with Seattle IF, reading about it on Emily Short's blog, etc.) it seems to work quite well. One thing is that beta testers will come and go (I've been guilty of that a couple of times
), so it's good to plan for that somehow.
For the record, your project appeals to me and I'd be happy to test it whenever you have something to test
Speaking more in general about organizing a group, you could just start by posting alpha builds to the IF beta testing site. It's not normally done but if you're clear about what stage the game is at I think it'd be OK. Actually that might be an interesting addition to that site if its organizer was interested, a kind of beta testing club that used the beta testing site features for organization.