There are a number of very good software-driven language courses out there, which I've gone some way toward playing with, but not to the point where I can say I know what they all do. I should emphasize that, so far as I can tell, they're all perfectly good as teaching tools. I don't think that there are huge failings in them. However, I do think that there are some general problems that they don't usually acknowledge.
No matter how much the marketing literature insists that their system is either time-tested or else the result of new, innovative thinking, the success rate in teaching languages seems to be low. There are many postings in various language forums from people who find some or most systems to be lacking. There is certainly none that seems to stand out as effective in all cases.
Part of this may be motivation. People may buy a system expecting quick results, only to find that they are committing to more time and effort than they had anticipated. Motivation seems to be one of the most difficult-to-measure aspects of language acquisition, and yet one of the most important to ensuring success.
One of the best means of motivating a student is to demonstrate improvement in performance. Language instruction pioneer, James Asher describes the contrast effect, in which students initially see great progress in language skills, only to become discouraged when the initial rate of learning doesn't continue. I suspect this is even more pronounced when using computer software than it would be learning through books or tapes. Use of computer software tends to be repetitive and requires a fair amount of attention. Language acquisition seems to require concentrated effort at some times, with casual experience at other times. Tapes, or movies, or television are better at providing this than any of the software I've seen so far. (Not to mention actually speaking with someone in the language, of course.)
There are, of course, other ways to motivate the student. At times, I wonder whether this might not be the brilliant idea behind what I otherwise consider the most annoying feature of Rosetta Stone software - it's price. If someone has spent $300-$500 on a yellow box containing some text, software CDs, and a microphone, they have a strong incentive not to waste the investment.