I for one am happy with the current release cycle. It is a good balance between new features and the ultimate stability of release 1.XX.N where N is the last version before XX+1 for example. The nightly build is a bit of a misnomer, many projects (C or C++ mostly) have some automated process that takes trunk and compiles it to produce a .tar.gz labelled nightly which "might" work. For web2py we should just hg pull; hg update to achieve that result. The nightly for web2py is more like a beta because Massimo hand picks code from trunk that will or will not be in the nightly which could really be a weekly.
I am currently developing the application I am working on and testing is easy enough that I test trunk at least daily. The web2py server is quite easy to use but the code in some places is complicated and has many possible use cases. It is only through exposure out to the user base that a large number of use cases of the code get tested. I have even seen problems reported where something was fixed but used by maybe one person in a way that should not have worked resulting in the dreaded bug that worked and became a useful feature for someone. Once I go to production I will probably move the releases a lot slower through the installed base. In fact I have 2 beta production systems up now and only push a new web2py when I push a new version of the application to the stakeholders to look at. Massimo provides a fantastic service with the web2py project and I would not like to see him stifled by a load of process. Anyone that has time to test will definitely help the quality, if you don't have time, that is okay too. I personally don't mind doing some release management between where Massimo is burning the midnight oil and what I let out into the production systems I have/will manage. The product is alive with new features and bug fixes sometimes occur in minutes once reported. That is worth a lot. Ron