I've flown KLM, Air France, United, Delta, Northwest, Comair, Royal, Air Transat, and Canada 3000 and over the past 5 years, as well as Air Canada.
I'd say compared to these airlines they are as good as all of them and better than most of them.
1. They have more leg room in coach than an US airline or Canadian charter airline I've flown.
2. their economy class seats are wider than any US carrier or Canadian charter airline I've flown.
3. Their meals are better than KLM, Delta and Northwest. The US carriers I've used didn't even serve food on many flights. (eg: YUL-ORD, AC served quiche for breakfast... whereas YUL-DTW Northwest served breakfast peanuts, YUL-ATL Delta served some cold sandwich pita thing, CVG-YUL Delta served supper peanuts
Only Air France had better meals.
4. Their fleet is new and young and nicely designed inside the caircraft I've flown. More pleasant to the eye than all the others I've flown. Their A340/330s and A319/320s are top notch jets to fly in.
5. Their flight attendants are their weakest point. Air France and KLM F/A's come off much more professional and worldly. Air Canada's F/A's are friendly and polite especially when compared to any US airline I've flown, but their mannerisms and style when working the economy class cabins appeared to me to be very rushed and less polished than European airline F/As. They are better and more professional than the Canadian charter carriers however.
6. Luggage space is average and comparable to everyone else
7.Their hub in Toronto is another weak link. It works well when it works but often flights are delayed. Admittedly this is often due to Toronto ATC but then again that affects their overall schedule. The movement between Terminal 1 and Terminal 2 is an unnecessary burden but should be resolved once the new Toronto terminal is up and running. This primary hub is generally good but not as extensive route & frequency wise as compared to large US carrier home base hubs. On that level the US carriers have a big edge over AC. Air Canada also tends to favor Toronto expansion over all other Canadian cities thereby leaving the rest of the country to frequently connect at YYZ. This may be good for their operations but often not convenient for people living elsewhere.
8. Their Montreal network seems underserved compared to other cities of similar size (3-4 million) but overall it works well there, even in the height of winter with all the snow they put up with at Dorval.
9. Their Vancouver network and operations at the airport are excellent from my experience.
10. Ground staff at airports I've used them out off are on the same level as the flighta attendants.. good but nothing spectacular.
11. Pricing is high but good discounts are available if you can book well enough in advance.
Overall I'd say they are as good or slightly better than KLM but not as good as Air France. They are overall much better than US airlines however with the exception of their inability to match US airlines on the number global routes served. I'd take them over most carriers the world has to offer.