You're right that their player base is small. They have a million people trying to get into their freerolls. You have to be there exactly at the registration to get in. I have only played one tournament so far so I'm not able to speak towards the rake back offer but as I read through it when I signed up, I realized it wasn't going to be big. I have received some money as an affiliate over the last few weeks. I didn't even realize someone had signed up and deposited until I checked it last week. With $4 in my account, I decided to play a tourney instead of hoping to build it up to a withdrawal.
As for their software and tourney structure, I like the site. It's nice to be able to have multiple tables open but have them all on the same screen. Having to bounce around from table to table on other sites can get annoying sometimes.
Overall, I give PokerChamps a 6 out of 10 but wouldn't suggest playing it ONLY because of the rake back offer. It's similar to other "bonuses" that take forever to accumulate.