I'm sort of an example. We rented through David's for a split-stay in June 2011 - first half at AKV, second half at BWV (both studio rooms). About a month before the trip I got a call that the member we were renting from for the AKV portion was "off the grid" - David's had been unable to contact them and despite the fact that we'd paid in full we no longer had a room. They said this had never happened before and that they were going to secure us a 1-bedroom at Saratoga Springs (a more costly room) with them paying the difference for the upgrade. We declined because by then I'd really had my heart set on staying at AKL (I managed to book a room using an AP discount - looking back I wish we'd taken the SS room because it would have been cheaper than our AKL room at the AP rate and we've never stayed at SS before). David's refunded our money and sent us a $50 giftcard for the trouble. At the time I was pretty upset - I still wish we'd been given more advanced notice, but I'm not sure what more they could have done otherwise. The BWV portion of the trip went flawlessly.
Since then we've rented with them 3 more times: BCV in 2012 (everything was fine) and we have 2 AKV stays coming up at the end of this year and it's been fine so far. As a PP says the renter gets a confirmation number and it shows up in MDE just like a regular reservation made through Disney would.
My biggest issue with David's lately is that it's gotten so popular that I've had a couple of instances where
I haven't gotten my first choice resort even at the 11-month mark (they offer me the second choice before booking and if I decline I get my deposit back). This is why we're at AKV twice for our next trip...I wanted VWL and called right at the 11-month mark and it was full! UGH!