I think term limits would stop the curroption in washington, and end our elected representatives thumbing their nose at their constituents. It would not allow people to get filthy rich by being in "public service" and it would result in people that want to be there for the good of the nation. It would also go a very long way to stop the hijacking of our country that is taking place right now.
You make a good point about volatility, but the flip side of that coin is that extremists like Ted Kennedy, Pelosi, Schummer, etc would only be there a couple of years and the damage they could do would be minimal.... Just imagine if Obama was not facing term limits in the Oval Office.
P.S. I am also in favor of term limits for laws (not the constitution/bill of rights/amendments made to the constitution)... If the law is not worthwhile enough to renew every few years, then let it die (ex: Clinton AWB)