I think a lot of people use it, but most just use Google search instead. I have a few web sites that are listed on it and each one gets at least 1000 hits from it. You may not be getting any traffic from it because your not ranking well in it or your products are not that popular.
I'm getting about 50 to 100 hits per day from Froogle. My real buyers, though, aren't searching directly through Froogle. They're searching on Google and clicking on the links under "Product search results for Widget" at the top of the Google results. For me, the people searching directly through Froogle seem to be in the research phase rather than the buying phase.