1) Prince is a run-of-the-mill specification driven methodology. By itself it adds nothing to anything. The most massive IT cock-ups in the UK are usually Prince structured, so you might say it is good for raising project costs one-hundredfold and keeping your account manager very happy.
2) I've never been anywhere where they use it. Many places say they use it and may insist you are certified, but in practice they pay lip-service. Needless to say, the State organisations (ie Accenture, KPMG etc) are the worst offenders.
Having said that some of the basic products (eg PID) are reasonable templates, so you can use them. Just as long as you don't buy into the philosophy.
The idea you can specify everything up front, execute the project in pre-defined phases, base your testing on your specification etc etc is all very persuasive. If however you start to feel it's a little unreal - not the way the World works, don't worry. It's not you that's got the wrong end of the stick.
There are obviously many valid elements in Prince. The emphasis on products can often be relevant. The continuing referral to the original business case is wise, but it's really better to approach projects from a more valid standpoint.
It's a complex subject. There are many books. A good starting point is always The Mythical Man Month - a must-read for any budding project manager.
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