This has rather quickly become my daughter's (3) favorite show. We like the (slow) pace of the show, as it is a bit of a relief from the ever-quickening tv programs out there right now.
Also, we think it is actually quite educational. While it doesn't necessarily teach easily quantifiable skills like colors, left or right, or a new language (like Dora), it does teach some very responsible social skills. Communicating our problems, helping one another, and getting along well are the top skills it reinforces.
Also, KB does a good job teaching calm problem solving and trial and error. A great example of this is the episode where Lolly's ice cream bell breaks, and they attempt to find a suitable replacement.
All in all, a great show - and one that does teach some important skills, while being just plain fun.