The problem is that it's a volunteer open source project, not that it's difficult to use. Thus, it takes a lot longer time to maturation than it does when you have funding and full time employees.
However, despite being in beta, that we've built up around 200 Appleseed nodes (50 running the latest code), and the main beta test server has around 600 testers, it's not doing too shabby.
A good chunk of the test users are average users, they're friends and family that I've roped into testing for me. I've been using their feedback to improve the software.
I'm doing a lot of work on the UI/UX in order to "train" users for the conventions of distributed social networking. Obvious things like tutorials and FAQ's, videos and such, but also I'm working on a redesign to replace link text like "Remote Login" with "I have an account on an other site", so there are constant improvements being made in that area.
Is there one site people can go to like Facebook and signup?
For now, no, it's still being developed. There will be many sites, some catering to niche audiences, others more general. I've registered a number of domains for that purpose, and I expect others to use the software to do the same. A social networking site for cosplayers, black professionals, or green party activists, or even workplaces or schools which manage their own employee or student social networks.
This is the same problem I've seen with other open source projects (and even Linux). There are just too many choices and people don't know what site to use, so they just use something else.
Appleseed could work if it became a platform, like email, where ISPS give you a page (and anybody could host their own), and they are somehow all connected together, but that would probably take many years.
The goal is for most people to use Appleseed without ever knowing what Appleseed is, much in the way people use the web without realizing that their web server is Linux + Apache.