Keep in mind that when I say very good I mean I'm using it in a hotel room through a Cambridge Soundworks Model 12... so it's relative. Compared to a CD player... it's wonderful. Sadly, I never did a shootout in the big rig. I never honestly thought the Nagra COULD sound as good. Will be a while before I get the chance...
Charles, I think your friend is spot on, however. I left the deck on from the moment I unpacked and over the course of three days it opened up *very* nicely. I thought it was very good from the start though!
As for things to look for... I'm not an expert. I got lucky; my deck was in very good condition when I got it. Definitely corrosion in the battery compartment and signs of abuse E.G. drops, etc. You also want closeups of the tape path... look for dirt, wear, etc. These decks are used in some harsh conditions and that doesn't automatically mean they're bad, but they do get some rough duty. They're built like tanks though. If possible you DEFINITELY want to see the inside of the machine. They open up easily like a clamshell so it shouldn't be difficult to do. Also, services and repair are still readily available (part of the reason I bought a Nagra). Trew Audio in Nashville is one place that can fix 'em and is factory authorized.
I will also note that they're getting quite a bit cheaper.