Very useful... but remember to turn it off and reload the page before installing bookmarklets that submit to a remote URL.
Exactly how useful? I'm not sure. It's one of those things where you only notice it by its absence. (I'm a big middle-clicker)
As for the problem, I think it could easily be fixed by only converting links where the detected URL doesn't end in an equals sign. (eg. 'http://www.somequotationsite.com/?cite=' + window.location )