I'm a fan of caffeine; it has given me very good results. Lowering lactic-acid pain in races, increasing endurance and fat-burning on training rides, etc. Here's some articles:

Caffeine Reduces Muscle Burning During Intense Exercise
Armstrong's Study Shows Caffeine Does Not Increase Dehydration
CP Tips - Caffeine
JAP - Effect of different protocols of caffeine intake on metabolism and endurance performance
JAP - Effect of a divided caffeine dose on endurance cycling performance,
JAP - Performance and metabolic responses to a high caffeine dose during prolonged exercise (cycling endurance increased +51%)
AJCN - Caffeine and coffee: their influence on metabolic rate and substrate utilization in normal weight and obese individuals

The diuretic effect is overblown because most people don't do double-blind studies with their own coffee consumption. If you drank 2-3 cups of water while sitting around the office in the morning, you'd need to pee in the next hour anyway. It the liquid water in the coffee that's making you pee and you don't end up dehydrated. A lot of people think of the effects of alcohol when they hear the word "diuretic", and yes, alcohol has a completely different effect on you than coffee. However, when you're exercising and exerting yourself, your elevated metabolism causes caffeine to have even less of a diuretic effect.

And caffeine's not a miracle drug by any means. It won't make you go faster, it'll just help you keep up your existing fast-speed for longer with less pain. Like with anything else, there are pros and cons and you have to balance them. One effect is improved reaction-times; probably not much of an aid in cycling. But one of my friends who races Ferraris swears by them. He OD'ed by taking a whole handful of NoDoz tablets before a race and ended up in hospital with heart palpatations.