It can take the heavy hits, and can definitely suck up the brunt of a pothole, but that's about it. They have little travel, and seem to be reluctant to move up and down, but it does have an advantage over rigid forks, and looks cooler too!
I replaced my telescopic fork with a Monarch Springer, mainly because the telescopic was pretty much seized up (it had been on a donor bike that sat outside in the rain and snow for at least two years). Looks-wise, the springer has it all over the telescopic hands down (depending upon the bike), but in my opinion a good quality telescopic is superior, especially in suspension travel.