For the kind of people who wouldn't stop playing FFVII until they got the entire party's Ultimate Weapon, and found all the Summons, then such a thing as Achievements and the Gamerscore a godsend. For the other people, the ones who just play a game until it starts to feel boring or repetitive, or don't really care if they finish the game, then the stuff is probably an "in your face" annoyance.
I think of Achievements as an added, outside goal, to a game. One that's completely optional. The Gamerscore is there as proof outside of your saved game. If I like a game, or like a certain Achievement, or am bored out of my mind, I'll tend to go for them.
The quest was a complete pain in the ass for me. First, I was riding the Unicorn to her hut. The witch was outside, and after riding my mount off the cliff right before her hut, I was so relieved that he still was (barely) alive, she attacks and kills my Unicorn. In the brief fight I tried casting a few spells on her to make her quit, which only produced the result of her attacking me next. What should have just been an annoying quest turned in to a pain in the ass one because each time I wanted to talk to her she would attack me on sight and I would have to yield, and within the next few seconds if I didn't initiate dialog, she would renew her attack. So yeah. Then after the quest's completion I learned all I had to do was use one of the items in the Vile Lair to cure my Vampirism.
For the most part, yes. Really, it's all people though. I think that 80% of players on XBL believe they can be complete annoying assholes just because they're not speaking face to face with someone, and have the security of distance and relative anonymity.