I've done a bit of messing around with Zotero, including giving a couple of talks about it early in 2007. I like it a lot, although it needs some sort of repository scheme before it can be thought of as a Refworks killer. Right now it's all local, so you'd better have a laptop, work exclusively with one machine, or have a USB key with Firefox on it to use Zotero nicely.

If I recall correctly, Zotero folks have been working on a central repository for some time -- hopefully it'll be out soon.