It does add some input lag still, but with the newest update it has been improved to what id consider acceptable for a slow paced action game.
Keep in mind, the higher your base framerate, the less added input lag there will be. It also depends on how many frames you add in AFAIK. Lossless scaling now allows for up to 20x frame generation. They still reccomend at least 60fps base framerate in most cases. However they do make mention of 48fps x5 framerate for 240hz and show a benchmark chart with 40fps base framerate.
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As
gghhoosstt123 mentioned, it can be used on video content as well. Personally Ive been using it on PCSX2 to get the new "Gran Turismo 4 - Spec 2" mod running at 240fps. It's not perfect, but it's better than nothing in some cases.