As one of those people crazily obsessed with pursuing simplicity, I really grew to appreciate Lua's design[1]. I started embedding it into any place I wanted simple extensibility in applications. Gradually I found myself writing more and more and more application code in Lua.
This didn't turn out badly at all - Lua's performance is really very good compared to any alternatives, and development was also much faster. With its easy interfacing with C there wasn't really anywhere I couldn't fit it. Lua being so flexible is probably one reason I really can't put it down now.
A couple of years ago I decided to develop an XMPP server (that's another story...). The choice was essentially between C and Lua, myself not liking Java and things like Python/Ruby being too heavy. In order to get off the ground I decided to write entirely it in Lua, and then port each component to C later. I'm happy to say I've continued to be impressed by Lua, both in its runtime performance and the speed and ease at which we can develop code. I have no plans for the C rewriting anymore - we already compare quite favourably with an equivalent erlang server in benchmarks.
Interestingly the "Why on earth did you choose Lua?" comments I received at the start have significantly died off over time. I'd like to think that people really are dropping the "Lua is only for games." stance - in my opinion this language is drastically under-used.
Also (despite a few inaccuracies) there was a good short talk posted recently about Lua[2]. My main quibbles are for example that Kyle repeats that Lua doesn't have print() built-in. His talk is primarily from the embedding perspective, and when embedding, yes, you have to explicitly pull in the standard libaries - but print() is certainly there, along with various other things. Secondly he claims that Lua does not interface well with Java, yet there are several projects allowing exactly that[3]. There are even a few Lua implementations /in/ Java[4].
[1]: Slides from a talk at Stanford by one of the Lua author's on design decisions made in Lua: http://www.stanford.edu/class/ee380/Abstracts/100310-slides.... [2]: http://kylecordes.com/2010/lua-strange-loop [3]: http://www.keplerproject.org/luajava/ [4]: http://lua-users.org/wiki/LuaImplementations