In my use case, I don't support IE7 (won't work at all on my SAAS app), and I only support browser clients.
I have simulated LB failures by killing nginx, and watched traffic flow over to the other LB without a big delay (in 30 seconds everyone was over).
Fancier IP failover is nice for sure, and would let some more enterprisey people in.. but for a lot of apps out there, DNS failover works great. Surprised from above how many people don't realize it exists or works so well (for so little effort).