Yes, they work much better — but not when you want to adjust the volume of one particular player in a group. Also, in some cases, the useful range of volume is 5-15% (a zoneplayer connected to an external amp), which is when the jumps using the hardware buttons are just too large.

I just don't get it: volume control is the #1 task for any remote control. If it were up to me, I'd dedicate 25% of screen space to it and tweak it endlessly to get it just right.