It works just fine. You'll make more money than if you give it away for free. Generally, people do the donationware thing when it would be nice to make a little on the side, but in general, it is good enough to just get people to play. it isn't a viable business plan. But that isn't the point.
If you are expecting lots of donations, or counting on them, then you are making a mistake. If you are just looking for the satisfaction of someone giving you a small donation when they didn't have to, of course it works.
If you are expecting lots of donations, or counting on them, then you are making a mistake. If you are just looking for the satisfaction of someone giving you a small donation when they didn't have to, of course it works.