He seems pretty well respected due to his writings, but I don't have any sense of what people think of Garage. I recognize a few names: http://www.garage.com/portfolio/index.shtml, but they're not on the list that Paul compiled: http://ycombinator.com/topvcs.html
That's not my list; that's just the list of names I got from asking people I know. There are a few firms on it that I haven't met partners from personally, and quite a lot of partners I know who didn't make the list. We don't have an official relationship with any VC firm, but we did invite GK to Demo Day.
Guy gave a fantastic talk at Stanford a few weeks ago. I'll admit that I was initially skeptical given the many posts that have appeared on the web questioning his track record. In response Valleywag's sarcastically-titled "Guy's Golden Touch," Guy had this to say:
"It's not really Guy's golden touch. It's more like 'anything golden, Guy touches.'"
In all seriousness, though, my first-hand experience with Guy has given me a lot of confidence in him as a VC. He's frank about his own professional experiences, going as far as to count his time at Apple a "failure" because Apple never realized their initial goal of dominating the personal computer business.
I understand how track record plays a role in fundraising, but too many people overestimate a VC's track record and underestimate personal attention/advice. This isn't to say that the big VCs aren't good -- one of Sequoia's partners gave me great advice when I was a sophomore in college -- but I think that there is a false pretense amongst startups that raising money from big-name investors is somehow in itself a measure of success (it's like being proud of your mortgage).
Raising money from big-name investors gives you a lot more credibility. This will help with hiring (I would rather work at a Sequoia backed startup than a NoName backed startup) and partnering.
Guy said Garage is a $20 million fund. Other VCs do single deals for more than that. I think he's a straight shooter with upper VC stardom written all over him.
His interview with Venture Voice talked a lot about Garage and he was very candid:
Does YC have a relationship with them?