Works fine for me. You still have to use the Log and Transfer window to import the AVC-I footage, and FCP7 gives the footage a QuickTime "wrapper", so the resulting media files will be QuickTime, not MXF. But the process goes very quickly--far more quickly than converting the AVC-I to ProRes, as FCP6 had to do (not to mention the fact that ProRes took up a lot more disk space).
Regarding any metadata in your AVC-I, it's carried over to the Quicktime-wrapped file, but FInal Cut can't see it/use it. Final Cut Server apparently can, but I haven't tried that myself.