I've known a lot of people burned by those deals.
The feeling you get is "I can prove my way in!" but the facts are usually related to which budget columns to drop you in...and if that's the case, budgeting is tough at that company, and the "contract-to-hire" is a huge gamble.
If someone wants you full time and refuses to hire, you HAVE to just treat it as a contract gig...and if the price is not contract-gig priced, you should probably move on.
