As the NY Times notes, Kijiji is the #1 classifieds site in Canada, Germany, Italy and Taiwan. Also of note is that there aren't any plans to integrate the listings into Ebay and that the site is free.
I don't see how they're going to continue with a free site, unless they swallow their pride and start serving up Google ads. Oh, how sweet would that be?
There is room for another service, however, because of the faults of Craigslist. Namely, I have visitors coming to my blog because of a post I did about searching all of Craigslist and how those who'd create the search were served with cease and desist notices from Craigslist. If there's anything that open source and the phenomenon with giving up control (especially of your code) is that programmers will create and the community will evolve your service in the way they want to use it. Forcing people to search by specific cities is just one of the site's gaps. The lack of usable graphics, as the Flash map found on Kijiji's homepage, is another. The trifecta is completed by the fact that a lot of listings on CL get flagged as spam or inappropriate by competitors (just ask those of us who've listed musical instruments).
Update: One missing fact from this post is that Kijiji already has 220 U.S. cities listed on it.