There is a good summary of cry-it-out research here:
I find that 99.99% of the "oh, my cousin's step-aunt's kid slept with mom until he was six and he's a real whingy brat" doesn't tell the whole story -- usually, he is clingy because the purported co-sleeping parents kept trying to do the cry-it-out thing and trying to force him out too early and too cruelly, and that just made him more needy...
I am the oldest (by a fair bit) of four and one of the things that made having a kid appealing was that my younger siblings were basically charming little kids. Definitely happy and independent; that's a good sum-up.
And my parents slept with us when we were wee, and slowly transitioned us from bed to crib in parents' room to crib in our own rooms without hassle, and we were never ever left to cry alone...
Not co-sleeping looks like it makes parenting unnecessarily difficult. It is not too hard to see how having to get up and walk to tend to a screaming child would lead to "Oh, we HAD to c-i-o..." But if you sleep with your baby, you gently wake when she wakes with no fuss or cry, nurse her back to sleep, and knock back off yourself.
Our daughter is pretty coddled, and we were basically her mattress when she was a newborn. She's 4.5mths old now, obviously too young for me to draw any conclusions, but she is a happy and outgoing baby who doesn't fear much -- she doesn't freak out if she's jostled accidentally, still smiles at strangers, etcetera.
I had a really rough night last night and an unusually large amount of things to do today, so she spent an unusual amount of time on play mats and in bouncers. She complained not at all...
I usually cuddle or "wear" her to sleep (she is napping on me in a sling as I type this), but she's often quite capable of going to sleep by herself.
When I'm an old lady about to die, no way in hell am I going to be thinking "That sucked, all those cuddles I had when my daughter was so small." I really don't know how the anti-cuddle crowd does it. It definitely looks like it makes life unneccessarily hard for the _parents_; I mean, it's just plain nice cuddling your baby.