Definitely a carriage shift, but Erika did use a segment shift mechanism with other models. 

I should mention that I accidentally posted a photo of my Erika 12 instead. Sorry...

I'll answer in order of the questions asked:
1. Ease of use? There are very few typewriters that I don't find easy to use, and the Erika is as easy as most.
2. I've never found a carriage shift to be fatiguing to use (maybe I have strong pinkies), not even when using standard typewriters with wider carriages, so maybe I'm not the best person to answer this. Some carriage shifts certainly feel heavier than others, but in this regard the Erika feels average to me. 
3. You got me on the reputation thing. I didn't realize that Erika had one, either good or bad. Did you glean this from reading someone's blog? And if there's hype surrounding them, I don't see why. They're average typewriters at best, and scarcity is relative. I can buy one on eBay any day of the week, so I don't consider them to be scarce, exotic, or rare.
4. With respect to their suitability for serious use, it wouldn't be my first choice. I'd much rather use an Olympia SM - even if it cost a little more - or any number of other portables from that era than an Erika. Then again, I only use standard models for heavy typing sessions. I can sit in front of a good standard for eight hours and walk away feeling like typing more.

In short, although it has a nice type action, the feel feel of that action is on the wooden side, so it's a good typewriter, but by my estimation not a great typewriter. I certainly wouldn't complain if it was the only typewriter at my disposal, but if I was shopping to own just one, it wouldn't be on my list.