I've played around with one, here are my thoughts:
-There is very little sustain on fretless guitars. Bass strings have a lot more mass and hence still sustain on fretless instruments, but skinny little guitar strings don't fare so well.
-It's tough to play chords in tune. With no frets to stop the notes, you have to make sure your fingers are in the exact right place, which is next to impossible when playing notes in the same position on adjacent strings with different fingers, ex. an E shaped barre chord.
Other than that, the gliss factor is kind of cool. May be one with a Fernandes Sustainer would work well.