Recently Mark Callaghan blogged about using O_DIRECT for the InnoDB transaction log. He noted that there was not a significant performance gain if the number of concurrent connections increases. I've done my share of testing and retesting over the past months to determine how useful this is. Based on a small TPCC workload (100 warehouses, 64 connections, 1 hour test, 5 minute rampup), I've seen huge performance gains by setting ALL_O_DIRECT for the variable innodb_flush_method using Percona XtraDB.
Without using Direct I/O, the benchmark generated a TpmC score of approximately 24,500 (HP DL160 G6, 2 x Xeon E5620 2.40GHz, 16GB mem, 4x300 GB SAS, RAID-10). After setting the variable to ALL_O_DIRECT, TpmC score went up to 48,000. Huge increase. This deserves some more investigation and some more testing. I want to also try this out on some older hardware to see if similar performance gains can be achieved.