I have an older SP that I use for commuting and touring. I have it wired directly to head and tail light without any pass through battery pack. I haven't had any issues with it, and I love not having to think about batteries. Only complaint is that I do think flashing rear lights are more visible to drivers than a steady red, but any light is better than nothing. Also, though it might be a placebo effect, I think I feel the drag when the lights are on, or rather I feel like there's a drop in drag if I switch the lights off, so I sometimes do that if there's plenty of daylight and I'm feeling tired. But usually I just leave them on all the time so I don't have to think about it.
One thing that's weird about dyamo hubs if you're not used to it is that they feel really notchy if you turn the axle slowly by hand because of the magnets. But if you spin them up to a decent speed with no electrical load, you'll see that the drag isn't very much.