The main problem I experienced with the default nameplates was that they kept jumping about as characters moved in a tight space, and there just wasn't room for all the entities' names and healthbars floating above their heads. Some nameplates inevitably got pushed off to the side, far away from the characters they were supposed to represent only to bounce up to the top or the right or the middle unpredictably as the character ran along. Furthermore, the default nameplates are largely the same and it was difficult to tell which ones belonged to whom.
Aloft, though, lets you modify the nameplates and their presentation of the information you need. You can, for example, make the nameplates relatively small to fit more nicely together in crowds, and then assign different health bar colors to various types of characters, from hostile, neutral, or friendly NPCs -- to players (friendly or hostile) of different classes -- or even to distinctions as fine as pets within your group or not if you want. You can set up all sorts of textual information too, such as name, health or guild affiliation, and make everything appear just as you want it so that it means the most to you at a glance. You can even make the nameplates of friends who are being attacked appear in a special warning color for as long as they are under attack, or add combat text to health bars just like that which normally appears scrolling up above characters' heads or over their portrait on the unit frame.
Aloft is the addon that makes nameplates actually usable for me, and I highly recommend giving it a try if you have any interest in nameplates at all. You can get it at Curse, or download the frequently updated version directly from wowace.com