I taught preschool for years, and I really loved the children but sometimes joked that teaching preschool was a great way to learn patience. The same could be set of Best Offer on eBay. It is a great way to improve sales, although it may at times also teach a seller the value of patience!
I have used Best Offer for years and I am a real believer in it. I think it is an even more useful sales tool in our "down" economy. It works a bit like an auction in reverse. You list your item at the price you really want to sell at and buyers will make an offer for what they think the item is worth. You then decide whether to accept their offer or not.
Going in to Best Offer, you need to realize you will get some occasional silly offers -- i.e. an offer of $1 for an item that is worth $100. I have learned over time to handle these by countering with a reasonable offer and a little note that says something like: "Thanks for your offer! I can usually discount __% with Best Offer" or "Thanks for your offer! $___ is the lowest I can take for this item."
I have Best Offer on everything but ephemera (vintage Valentines, Christmas cards, postcards, etc.). Since I already offer free shipping on my vintage paper items, I don't want to negotiate lower; however, I periodically have Markdown Manager sales on all my ephemera. (I am running one right now for $1 off each card.)
I have not inflated my prices before adding Best Offer, as I want to stay competitive in eBay's Best Match search. I would recommend against inflating prices to add Best Offer for this reason.
For the items with Best Offer, I always accept offers of 10% - 15% off. If someone offers less, I may accept or may counteroffer with a polite note. I am a huge believer in the counteroffer with a polite note, as I feel this generates regular sales for my store.
Occasionally buyers will repeatedly send ridiculously low offers, or send offers with a rude note like "$1 is all this is worth." I just decline with no note, and block those buyers.
I hope you find Best Offer beneficial too! I make Best Offer sales most days, and think it is a great eBay tool.