Just last week I did Manchester Piccadilly to LGW by train. Departed Piccadilly at 1315 and arrived at LGW at 1645. It would have been quicker had I not walked from Euston to Oxford Circus before then getting the tube to Victoria. Oh, and I bought a few bits of food in M&S in Victoria before boarding the train for the last leg. It can be done in 3 hours.
MAN-LGW is handy for south coast destinations I guess. I enjoy travelling by train and it can be a very pleasant experience. That said, I think some posters description of the flying experience are over-exaggerated with an underlying agenda and I've experienced far more cheerful, happy and polite crew on BA flights than I have on the trains.
I too had wondered whether the service is aimed at connecting into EI. Otherwise, I'm not sure as to its potential.