I have a lvl 70 team with one Priest and 4 Hunters. It's very enjoyable and 1-60 was a total breeze. 60+ instances were more challenging. I've cleared Sethekk and most of Steamvault, but had real trouble with the first boss, after taking out the second with no issues. I'm working a bit on gear and will attempt some other lvl 70 instances soon. I doubt Hunters can clear most heroics, but I'm hopeful I can find a boss or two that I can farm.

As for PvP, I kinda suck at it, so it's hard to know how much is the hunter class and how much is me. LoS is a real pain and mitigation is pretty high against hunter shots, anecdotally speaking. I think there are much better options for Arena as well. I'd agree with the other posters that Shamans seem to be the best all-around PvE and PvP grouping at the moment.