The yellow covers are a bit of a Gollancz tradition.
I read my first SFGateway book a couple of weeks ago, and the quality was fine. I guess it depends on the condition of the original. They do apparently have some sort of QC - they did hold back some books because they weren't up to scratch. It makes you wonder how bad those must have been.
I kind of feel like project is already dying, which is a great shame. There don't seem to have been many new releases lately. I expressed my problems with the pricing in their forum some time ago. None of the books I've bought from them (15 or so) have been at the higher price. I bought most of them in their sale over Christmas.