It's all true - the controls are messy, the graphics were outdated even when the game went gold, and it has never been running stable for more than a couple of hours. Still, it's one of the best 3D RPGs of all times (together with Gothic 2).
Why? More than one reason. The setting is convincing. It's kinda medieval, but believable. It's got a dark, but still humorous setting (not daffy, though). Eveything's rough, but sill likeable, which is kind of a rare balance to strike [remember Morrowind - great, but basically everybody _hated_ you].
The world is actually quite small, but everey inch is important. If you do all the quests, you get too peek into almost every corner. There are no vast fields where nothing is happening or dungeon crawls that keep you fighting against 500+ rats/worms/frogs/whatever. Every inch has a prupose.
There are basically trhee factions in the game, corresponding to the main career paths you can take. They do play out differently, although not as much as in Gothic 2 IMHO. Still worth multiple play-throughs, though.
Probably the best resource for Gothic 1 and 2 info is http://mondgesaenge.de/, originally in German, but they seem to have English translations, too.