I take the CR version, but only rarely. I have to be careful not to sleep too late, as my blood sugar drops (but that's from a preexisting hypoglycemia problem, not the drug).
I don't find it hard to function after waking. In fact, it helps pretty good. I'll usually set an alarm or something to make sure I don't overdo it...and keep some Gatorade and glucose tablets handy for the inevitable bathroom call wake-up a few hours in.
I've had insomnia most of my life. The only thing that worked reliably is Tylenol PM, or more to the point, the generic version of Benadryl with the same allergy med in it, so I don't take more Tylenol than I can help. Still, that stuff only goes so far. Ambien will usually knock me down for hours, starting just about 15-20 minutes after I take it.
The only real beeotch of it for me is it's not cheap, and my insurance doesn't cover it. Still worth it for me, however.