Of all the 500 series machines I've owned, the vast majority (with drives installed) have been IBM models. Of those, the vast majority are still kicking; I've only had a couple fail, though unfortunately they tended to be the higher capacity ones.
I did get one or two with SCSI->ATA adapters, but older ones are a tad slow. I'd use them only if I needed much larger capacity drives or I had no options for replacement (it's hard to find 2.5" SCSI drives at all, let alone over 500MB).
As for your question about interchangeability, yes, they're perfectly swappable with every PowerBook 1xx series machine save for the 150 and 190 (which are ATA-based). The only real consideration is capacity, of course: many old 'Books have drives in the 40-80MB range, where the 500 series generally had 120MB minimum installed.