i have an alfine 8 on my foul weather bike.
living in pancake flat chicago, 8 speeds is way more than i need, but the alfne 8 hub came with the bike i wanted, so.......
i typically cruise in 6. i'll bump it up to 7 with a nice tailwind, or drop down to 5 if i'm battling a headwind. for ripping tailwinds i will go all the way up to 8. at stop lights i usually drop down to 3 and use that as a starting gear and very quickly click my way up to 6. i never go down to 1 or 2 because there aren't any hills in chicago.
because i use my IGH essentially as a 3 speed the vast majority of time, i can't say i notice anything at all about the steps in between gears. i'm always in 6 unless it seems really hard or really easy to pedal due to wind, and adjust from there. i also have a 20 speed road bike and i find i use it very much the same way. i only use about 5 of the 20 speeds with any regularity, again because chicago is so unrelentingly flat. expressway overpasses are considered bigtime hills here
i will say that IGHs tend to weigh a ton, and even though it's rotational weight at the center of the wheel (where it matters less), i can still feel the drag of that weight.
all in all, i like the simplicity of an IGH for a foul-weather commuting bike, but i'll also always have a derailleur equipped bike for fair-weather commuting. having one of each is nice.