I used it this morning, and it was all fine, though expensive. Caught the 9.12am train, went through to Victoria and it charged me £3.70. Technology in the twenty-first century!
Yes, the charging seems to be excessive. Last night, the return cost me £3.00 as well from Victoria (that's what the Oyster reader showed, anyway), and according to TfL a Zone 1-3 single on Oyster should be £2.70 peak, £2.20 off-peak. In my card history online, I can also see the entrances/exits from Harringay not showing up, meaning I get charged the £4.00 not-touching-out fare sometimes.
That's curious - yesterday morning I was charged £2.40 for Harringay-Old Street, less even than a normal Zone 1-3 journey, a little cheaper than half a return train ticket and a lot less than a single ticket. It could be that they're charging an arbitrary amount (maybe £1.50 peak, £1.40 off-peak, judging by the last two posts) to get you onto the tube network, then the standard tube fare from then on.