I read this book (in its English translation) for IB ToK 2 years ago. My teacher used this book as an introduction to philosophy for us, and it worked fairly well.
The fact side did a better job than a textbook would have at conveying information, albeit with less predictability as to what stayed in memory and what didn't. At times this part was tedious, but rarely to the extent that I put the book down to do something else.
The story certainly has its weak spots, but provided a sufficient background for and relief from the philosophy lessons. The characters in the book within the book serve a larger purpose than merely providing most of the plot of the story. They are rather an attempt to prove that a thought can be sentient. This is directly analogous to making an AI-complete artificial intelligence. If a thought or other internal construct can be sentient, then, in theory, an AI-complete artificial intelligence can be created. If a thought cannot be sentient, then AI-complete is impossible. Although I can't think of a reason why a sufficiently complex thought can't be sentient, there's probably objections that can be raised to this (first among them: how do we define sentience?).
As for parents thinking this book would make their kids magically smarter, that's just absurd. The kids would either understand it or wouldn't (and no, that's a continuum, not a boolean). Psychologists have found that intelligence stays pretty consistent within a given individual throughout their lifetime, so the most the book could do is make the kids that understand it use more of their brains (and perhaps discover the fun of making that gray matter push its limits). Chances are, for those that didn't understand it, it would only confuse them and possibly contribute to an inferiority complex.
pfft: Zen and the Art of Motorcycle Maintenance did seem to do a better job of it from what I read (we had to read that later on in the class, but I only got about 100 pages into it thanks to an early case of senioritis).