I use Octave everyday for my business and I absolutely love it. I have a background in Matlab (and I still have a student version someplace) but turned to Scilab and then Octave to do audio signal processing. It's a fantastic package and you can't beat the price, but if you want to use it as a Matlab alternative there are couple of gotcha's that I ran into:

- the plotting using gnuplot is not as flexible as Matlab's plotting, although it is getting there

- in an attempt to steer clear of copyright issues (I presume) many (most? all?) of the mathematical functions have been written from scratch, and while they typically use the same references as Matlab functions, Octave functions may give slightly different answers than their Matlab counterparts. If you need 100% compatablity with Matlab, make sure to do plenty of testing first.