It makes the game "easier", sure, but "easy mode" doesn't really become apparent until the late game, especially if you built your character to take advantage of all of perks associated with VATS - particularly Grim Reapers Sprint. Otherwise, VATS helped in the early-to-mid game in FO3, but didn't become a game-breaker until later on. I say this because I'm playing FO3 GOTY right now, and I went to Point Lookout at about level 10 with Lincoln's Repeater. Even with VATS, I had to repeatedly reload the game defending the mansion from the tribals because I kept dying. There were other instances where the moment I ran out of APs in VATS, the bad guys proceeded to seriously damage my character. Now hopefully, in New Vegas, VATS will be balanced so that it helps from early to end-game, but never becomes "I win mode" at any point - I would understand if you take more damage in VATS mode than you did in FO3.