I've been using it for this purpose exactly, and I cannot recommend it.
I have three storage locations also; work, home and external HDD. The problem is not so much the fault of SyncToy as it is WMP11. Each time WMP plays a compatible file format, it alters the file. I believe that this is because it is setting a value for 'Last Played' in the ID3 tag data or in the file metadata itself. The long and short of it is that playing a song makes SyncToy think that it is an updated file, and totally overwrites all the other versions. This is a really unneccessary thrashing of the storage drives.
I have not yet verified if WinAmp or MediaMonkey have this problem as well.
The solution would be easy....add a setting to SyncToy that would set a change threshold for file comparisons. Make the switch specific to file types. For example, set the threshold on MP3 files for 1%. If the percentage of changed data in paired files is in excess of 1%, then overwrite. If less than 1%, leave 'em alone.
I have to assume if WMP11 ever gets FLAC compatibility (native, not via FFDSHOW), then it will accordingly fiddle around with them as well. I know it does with WMA and MP3.
Good luck, and if you find a better solution, please post it cause this is driving me nuts.
