Testament to success:
I started my current job 1 1/2 years ago. When I started everybody had to use bugzilla/CVS. I setup trac/svn for my own use.
Today nobody uses bugzilla anymore, and only a few still use CVS, the rest has gone over to trac/svn and has been happy ever since.
What better testament can there be?
Trac is excelent because:
* it has a wiki
* it has a timeline of activity
* it has issue tracking
* every entry field allows wiki syntax
* you can link from anywhere to anywhere simply
* it has a source browser
* it has milestone management
It has greatly reduced the amount of mail send around and greatly structured communication and development for us. Our customers also access the Trac and file tickets there.
Trac is an excellent integrated tool when it comes to browse the source code, create wiki pages and manage a few hundreds or thousands bugs. But forget it if you plan to use it primarily as a bug tracking tool for a very big project. The DB model used for bug tracking is quite simplistic and does not provide advanced functions like bug dependencies, "duplicate of",...
I've had to fight with ticket and source viewing systems in the past but Trac does it wonderfully. It is true that it's bug tracking is not as detailed as bugzilla or some other bug trackers but it gets the job done. The community around Trac has posted up many plugins, patches, macros and hacks that (can) make Trac fit what you want even more.
It's light weight, simple to administer, and easy to use!
I introduced trac in a scientific software development environment. In a very short time it was well accepted even by non developers. One strength of trac is the integration of ticketing, scm, and wiki with one intuitive ui.
The other strength of trac lies in the numerous plugins which add a lot of useful features to the trac core like calendar, blogging, source code review other scm than svn, tags, forums to name a few.
The best part of trac is the incredible community. There are literally 100s of plugins that can extend trac. The irc channel and mailing lists are always active. Trac is basically a plugin framework and very easily extendable. If plain trac doesn't work for you, try some plugins from trac-hacks.
Expect the initial setup to be simplistic, very basic, and just work(tm).
This is a solid base for project management, with multiple languages and solid timezone support out-of-the-box.
But when you need more and get a decent selection of Trac plugins, you'll notice how this framework shines in terms of customization and extensibility. Not all the nice bells-n-whistles, just professional low-fuss functions: intuitive and tidy web-UI, clever content cross-references by ubiquitous wikification, and more.