I'm a COSTEP with the IHS right now.
the PHS rocks. It has many of the advantages of being a uniformed officer (the tax advantages, retirement, and insurance for you and dependents, travel stipends, housing allowances, etc.) with few of the negatives associated with the other military branches (you get to CHOOSE where you go, you won't get deployed, etc.).
The IHS is similar to the VA in the way the practice is set up (at least in the Am Care clinic arena-- haven't seen an IHS hospital yet, but from what I've heard it is also similar to the VA. They use the same pharmacy software, etc).
The pay is competitive with private sector jobs once you factor in the tax advantages and continues to rise with years of service and promotions to higher ranking officer status.
The worst things about it, as far as I can tell from my experience are the following:
The first couple years pay (at least in Pharmacy) are not that great. It gets competitive after the first 2 years of service.
The locations where you will get student loan payback money may not be your first choice locations-- the funds are distributed every year based on money allotted by congress for that year, and the IHS grants that money to its employee applicants starting with the most "needy" sites first, so that those sites will have an advantage in recruiting. You want to be at a site with an IHS score of 70 or higher-- ask whoever you interview with about this to make sure your location is likely to get funded if you want student loan payback.
The beaurocracy (I can't ever spell that word) is astounding. Copy any and every form you fill out before mailing. It will most certainly get lost. Multiple times. Be prepared to follow up on EVERY bit of paperwork you do and in any dealings with headquarters in MD. Do not send anything US Mail. Use Fed Ex or UPS with delivery confirmation. This whole situation is hard to explain unless you have experienced it... just be prepared. And seriously. Make copies.
Other than that the IHS is a great place to work, with excellent benefits and hours, and endless opportunity to travel to different duty stations and to see our country while learning about a variety of fascinating Native cultures. You can also transfer laterally into other agencies such as the CDC and the NIH with no problem... its all the PHS. I love the IHS and am 99% sure I will sign on the dotted line in about 12 more months.