About four months ago, I wrote about Project Euler. Back then, I posted that I would do the problems in Ruby to try to hone my skills there. Since then, I've mostly done Ruby but I have also done some solutions in Haskell for speed reasons, namely prime number generation. (I should really revisit how I do that in Ruby...)
Project Euler is a good way to introduce some basic concepts. Each problem is best solved using a given set of the language. They are probably better exercises for those who like puzzles than the exercises normally taught in beginner books or in first semester programming courses. However, I see two problems with using Project Euler as a long-term means of learning a programming language.
First, Project Euler's focus is not on learning a given language or teaching about a given set of language features. Project Euler's focus is on the mathematical problems. More time in solutions, especially in later problems, is spent on figuring out the algorithm or method for solving the problem rather than on how to write that algorithm in a given programming langauge. Some language features or methodologies are never addressed because they never come up in the process of solving the problems.
Second, the scope of Project Euler problems is relatively small. The only focus within a given problem is answering that problem. Each solution amounts to a one-time script with components you might reuse later. As a result, Project Euler is insufficient for learning how to develop applications in a given language. (It may, however, have use in learning how to develop a library or module since some algorithms or components are used repeatedly.) There is not sufficient scope to investigate using it to develop an interactive application.
So I think that Project Euler works out well when first starting. However, once familiar with the basic concepts, supplementing or replacing Project Euler with another method of learning, e.g. building an application, is needed to ensure that there is further learning.
This is not to say that Project Euler should be completely abandoned at that point. It just ceases to be useful for learning about applying the programming language by itself. If you happen to enjoy the puzzles (I know I do), feel free to continue to do them.
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