Go for you, Des! Go for it!
I have never understudied myself, but I believe that most of the positive benefits that have already been mentioned will come to you by taking on an understudy position - being decently paid for the work you are doing, being involved with others who are at the top of their professional game, potentially having the chance to network with significant individuals and to (potentially) be offered the chance (once or twice at least) to appear in your own right, if your agent can negotiate this for you/circumstances demand it. At a time especially of sparse work and poor funding, I don't see how you can lose if you are lucky enough to land this understudying contract.
With that said, of course, there are difficulties with understudying that you'd need to be prepared for if you take the thing on. Firstly, there is the sense in which an understudy is chosen precisely because it is felt they can approximate strongly to the performance that they are covering - the nearer you come to doing West End understudying, the more pronounced this tendency is. The directorial team are not interested in you giving your own interpretation of a character - they are interested in you giving your interpretation of someone else's interpretation of a character - and that, I think, is challenging for most actors, who are used to channeling a performance from within themselves, not simulating someone else's. This makes understudying simutaneously both very hard, and somehow easier to write off as 'inauthentic' performance. I agree with Nathan that, actually, the understudies are often the real unsung heroes of any performance, but you must be prepared to roll with these preconceptions.
Another interesting issue is the particular way in which the production team deals with its understudies. I know that many, especially those with large casts and touring schedules, come up with what I personally feel to be a decent compromise - they give the understudies small parts in the production (which will not inhbit the amount of time they can allot to understudying, which is considered more important) so that the understudies get used to the intricacies of the show on a day to day basis, should they have to step in. On the other hand, there *are* alternative models in place: I know also that some shows hold separate understudy rehearsals delegated to the AD (armed with a full set of directorial diktats) throughout the time of performance. All the understudies work together, and are frequently in effect unknown to either the director or the main cast. This is not only a little ostracising, but can result in some very nerve wracking performances when the poor understudy is thrown onto stage in the midst of other performers whom he/she has never actually played against, who are often 'names', and who sometimes barely know who the understudy is. Then, you really have to rely on all your wits and hard work being in place!
It is generally felt, in the US, that being an understudy is a good way to get further doors opened for you - and this *does* appear to be the case the vast majority of the time. The position of a UK understudy is generally less exalted, and it seems to be rare that, say, the director of the production will become so enamored of the understudy's work that they begin to employ the understudy as full time performer. As I've said, in some cases, the understudy and the director are unlikely to even meet - except glancingly, and at the initial audition. That's not to say that the fact you are involved in a great production, being directed (at whatever remove) by a name director can't be used as a selling point by you personally. If you are actually offered the chance to get on the stage and perform, then even better!! And there are always exceptions - some understudies *do* get to do astonishing things (one of my drama school tutors was so good as an understudy that he was ultimately promoted to performing an extensive run as the lead role!).