Opportunities:

For aliens with extraordinary ability, O-1 could be a very good alternative for H1B visa. If you were not selected in your H1B lottery or have maxed out the 6-year time limit of H1B visa, O-1 could be the best non-immigrant option for you.
O-1 may not be as difficult to qualify as its immigrant counterpart EB1A. An alien, whose credentials may present a hard case for EB1A could still have a very good chance of securing an O-1 approval.
O-1 holder can have dual intent, meaning extension of O-1 status is not adversely affected by application for permanent residency.
O-1 visa could be your stepping-stone towards your immigrant visa, laying down good record for green card petitions such as EB1A, EB1B or NIW.
O-1 visa is especially favorable for J-1 holders subject to the two year foreign residence requirement, who can apply for O-1, seek consular processing O-1 and then reenter US without obtaining J-1 waiver beforehand.

Challenges:

O-1 visa/status is targeted for aliens of extraordinary ability or achievement in the sciences, arts, business and education. The applicant needs to demonstrate that he or she possesses a level of expertise indicating that the person is one of the small percentages who have risen to the top of the field of endeavors.
Only the U.S. employer or a U.S. agent can petition for O-1 visa. An alien cannot apply for an O visa for himself or herself. Finding a qualifying employer or communicating the visa situation with the employer could be challenging.
An advisory Opinion from a peer group, labor and/or management organization with expertise in the specific field involved is required.

Provide guidance on employer sponsorship and effectively communicate with employer to facilitate the O-1 preparation process.
Provide guidance on obtaining advisory opinion from your specific field of endeavor.
Provide sample recommendation drafts related to your field. Review and revise recommendation letters provided by your recommenders.
Interact with you through meetings or conference calls to investigate your field and achievements, come up with the best case strategy and guide you through the process.
Draft the petition letter on your behalf. Carefully describe your achievements and supporting documents, pointing out to USCIS that each legal requirement has been met.
Conduct background research on your field and relate your achievement to the US national interest, maximizing your chance of approval.