There was this guy who produced an album using the 02R with a bunch of Tascam DA88 multitrack machines and got a nice award for the sound in the US. I don't recall the name of the producer or the band, perhaps you can Google it up.
The preamps are not that great, although they beat most built-in preamps in mid-priced soundcards. Pay attention to gain staging, and make sure to use the input attenuation in the 02R to avoid clipping when boosting the EQ. That is one of the easiest way to ruin the sound with the 02R, otherwise. The A-D conversion doesn't suck, but it sounds very nasty when clipping.
The EQ is not very musical, but you can do some useful stuff with it. It's a whole lot better for cutting than boosting, anyway. The compressors are not wonderful, but once you learn then you can even things out and get some punch in the sounds. Just forget what the millisecond display shows you, and use your ears instead. It's completely off the chart.
There are some decent effects in there, and if you've got the TC UnitY card in the 02R there are some very good reverb algorithms. Otherwise just use outboard, as usual.
I'm sure you could make a decent album with ADAT's and the 02R. It's not going to be easy to add dirt and grit for a rock album though, unless you've got some nice front end units (ie preamps, compressors and what not).
No matter what, you'll be having a very solid and inexpensive setup with most tools needed for recording a full band. Also, I do think that the 02R is very nice to work on. It makes you feel like you know what you're doing, and it's a whole lot more creative as a mixing environment compared to using a mouse and a computer screen (and this comes from a guy who's doing the computer-based-studio thing and sold his 02R).
Good luck with what's the most important, making that music!
Cheers,
Tomas Danko