1) Do you find you use your remote for basic operations but still reach for the native remote for extended functions? (It would seem that you would end up with either a lot of buttons or deep menus to search through to find the reverse 3:2 pull down setting for your DVD)
Yes, I use one and only one remote to control every single function of the entire system: Home Theater Master MX-350.
2) How simple or elaborate are the macros capabilities of your remote and do you use them? Is a simple and reliable "Watch a Movie" macro such as this really possible?
You can have up to 190 steps per macro with the HTM remotes. If you need anywhere near that number of steps your system is way too complicated and ideally you should rethink it, BUT you can do it if you need to.
A 'watch a movie' activity is easy to implement.
With most all the functions above set by a toggle or cycle rather than being explicitly set (eg: TV sound cycles through Stereo / SAP / Mono) it would seem difficult to start from a 'known state' unless you exclusively used one remote and it was able to keep track internally. So can these macros be coded to work just as well if you were previously watching TV, listening to a CD or playing a video game?
Toggle commands wreak havoc on macros but yes you can arrange things so that you can always start from a known state. It is actually not very useful for a remote to try to remember the power state of each device because it is very easy to get out of sync. The Harmony remotes have their 'smart state' idea but you'll end up constantly using the 'help' to answer questions about which device is on or off with the complicated sequences you described above. It's better to plan the control out yourself and use macros to get you back to a known state from which to invoke other macros.
Here is an example from my setup. I only have a receiver, cable box, and dvd player and the cable box and dvd player are both 'toggle' power devices.
The majority of the time, I watch cable so cable mode is my 'home' state if you will. My ON macro turns on the cable box, then the tv, then the receiver and switches the receiver to Video2 (where the cable box is connected). Now if I wanted to watch a movie on DVD, I have a press-and-hold macro on the DVD button. It turns on the DVD player and switches the receiver to the DVD input. Even if I were to then manually switch to Tuner, I can get back to the 'home' state via another macro on the cable button.
3) If someone uses a native remote for some quick function does the universal remote "lose track" of the current state of each device causing macros to misbehave?
See above. You often need 'fix it' macros that unconditionally take the system back to a known state from which you can invoke other macros.
4) Was it worth it - How much time did you invest in setting up the remote in order to avoid 3 minutes of remote juggling and button pushing everytime you go to use your entertainment center?
The most time consuming part of programming a universal remote is the planning beforehand - which functions you want on which buttons, determining the steps for macros, how to get back to a known state if necessary, etc. The actual learning of the commands, even if you do every one manually, takes minutes.