I have been watching this seasons IPL a lot more than previous seasons - mainly because of the ITV coverage, but it doesnt interest me as much as Test Match cricket and ODI's. I think it's fair to say only India could host this tournament in this fashion and credit to them for making it a massive success. With two more teams being added next year atleast, the success looks to continue.
ITV look a bit lost with this but it is their first go, and if they keep this contract for a few years they should improve the viewing experience.
The cricket is exciting, the atmosphere electric and it is bringing more fans to the game, but as you point out, almost at a cost to Test Match cricket. I've been keeping an eye on the current series in New Zealand where they are playing Australia (NZ's biggest series in their cricketing calendar) and the turn out is poor. Wherever England go, other than Australia and India, the travelling barmy army always outnumber the home support. Never a good sign for Test Match cricket.
As for your comment on the retired Aussie contingent - I saw Adam Gilchrist's first game in the IPL - a man who hadn't played competitive cricket for over 6 months and he stepped out and played a blistering innings - I know this version of the game is right up his street, but it was extrodianry how he settled in so quickly. 54 off 35 balls and it was a quality innings.
Him and Hayden help change the face of ODI cricket, and going back further even Slater helped with the quicker pace of the game even at test match level - high intensity cricket was made by the Aussies and it's where they excel.
With Pakistan and Australia coming to England this summer with ODI's the order of the day it should make for some interesting cricket on home turf.