As far as i may concern the bone heat system is cool, it saves many hours of vertex grouping nor the envelope system. indeed the system developed by the blender guys is awesome. Blender are now already being the first open source 3d software that can fully match several major paid 3d software.
Anyway, what you should all know is that in 2.46 you can't bone heat two mesh with one armature structure. you have to do it one by one. But though it still too cool to be true