Advantages: It's OSS, and there's a freely downloadable community edition, so all it costs us is the price of a VPS. Sugar is fairly full-featured and has a vibrant community around it.
Cons: While "fairly" full-featured, there are some things missing (at least in CE). For example, the record for a company doesn't have a field for NAICS code. That, to me, is a fairly basic thing a CRM ought to have.
Also, Sugar is written in PHP. Now that's not necessarily a "negative" in the broader sense, but it's a negative to me, since I'm not a PHP programmer and I don't like PHP. The net result is, I'm very reluctant to make any customizations to our Sugar install.
There also doesn't appear to be much in the way of process or workflow features. This is the kind of thing that we'd hack in ourselves if we were using something written in Java or Groovy, but not really interested in maintaining a bunch of PHP stuff.
Still though, for an early stage startup, who just needs a place to track accounts, leads, opportunities, etc. Sugar is a decent enough option.