Some colleagues and I have used WeBWorK for in-class quizzes for a couple of years. We've tended to avoid multiple choice and true false questions, instead using the power of the answer checkers to let students enter mathematical expressions or values. The main issue we've found is that students aren't accustomed to working with multiple chances on exams and being told immediately that their answer to a test problem is wrong. When told their answer is incorrect, many students rewrite their answer using an equivalent form. Some try to solve the problem in a different way, but we've found very few will correct their mistakes. More likely, students overlook their mistake and 'fix' something else that they are less sure about. There were some other issues, too: We couldn't include as many problems on quizzes, since 'n' chances at a problem could turn a 5 question quiz in to a n*5 question quiz. Also, the 'all or none' credit aspect seemed to impact student moral during the quizzes.
One of the things we have done lately is to have students find and discuss the types of mistakes that are being made on the quizzes. This seems to provide value for the course and also helps students transition to immediate-feedback quizzes.