I'd say pretty well, generally. Desktop applications, maybe not so much because there is a lack of GUI libraries available to it. There are some, but it would be a hard job. So I wouldn't recommend it for that.
For anything network server related however, it's fantastic. Because it was built and supported by Ericsson, they built it with support for all the common protocols. If you use a language like Haskell you've got to write libraries to support things like Web protocols, SMTP, all your basic protocols. Erlang comes with all of that, so it's the best choice for network server applications, especially since server applications tend to be concurrency oriented -- you can just start a new thread for each connection, that's how ejabberd works.
