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In my experience there are two big issues with homegrown multiuser installs. The first is that Notes is very chatty with notes.ini. If that is on a network drive -- and it almost always is in this scenario -- and Notes can't get access to the notes.ini fast enough, you get crashes, hangs or timeouts, or Notes will simply lose its marbles.
The second major issue is upgrades. You have to upgrade the server then get all the updated files copied to everyone's profiles before they can use Notes. That can be scripted to some degree, but it's incredibly messy.
The biggest downside to switching to multiuser installs is that you need enough space on the terminal server for everyone's Notes databases. The core templates and applications are shared among all users, which reduces used space and makes upgrades easier, but each user's profile will contain their notes.ini, desktop, cache, bookmarks, address book, and any local replicas they make. You can redirect this to a network file server, but then you're back in the same boat with potential timeout issues.