I'm also divided. One side of me says:

• Rename "Generate Coins" to "Help Network" and don't even write about a reward in the pop-up.
• Put a pop-up warning saying that it's better to use a more efficient miner (power-consumption-wise) to help the network if the user has a graphic card.
• Improve miner (at least add SSE2 support, etc.).

I think having this option in the default client is a good thing for the network.

The other side of me says the on-board miner won't ever be as efficient as standalone miners and it will be a waste of resources. Plus, I'm guessing none of the alternative clients does/will have a built-in miner. I still voted for "keep it with a warning" option.