Sponges get a bad rap because if they're the only filters you have you don't a way to remove nitrates. As long as you have sufficent LR or a DSB, the "nitrate factory" aspect of sponges should be irrelevant.
As tyoberg notes, sponges must be cleaned when they clog up. Be sure to clean them using only sea water... anything else will wipe out the useful bacteria that take up residence.
I have a sponge in my lifereef overflow and one on my return pump. They get pretty brown pretty qiuck, are they trouble? Should I remove them? Will the overflow be ok with out the sponge? What about fish getting in the overflow?