I don't think this episode had much impact on me as a kid, but watching it now I realised what a wonderful piece of work it is. I've often had a problem with the Borg, in that they just aren't very interesting. Certainly they've managed to give them a cold sort of sense of dread, but mostly they are incredibly bland. 'I, Borg' finally gives them a new angle and it was much needed.
It's also surprising just how little they featured in the show, with this only being their third appearance. We get a brilliant character piece here for Picard, but also for Guinan and even Geordi. It's especially unnerving to Guinan, usually the poster child for serenity and good sense, to clearly be angry and unwilling to let go of her hate. Picard's responses are more expected and the episode allows us to go on a wonderful journey with him. I was particularly impressed by his mental transition back to being Locutus.
The real reason the episode works as a whole though is because the great performance by the young actor playing Hugh. He presents vulnerability and confusion well, without breaking into anything overly emotional or melodramatic.
It does seem that this episode would be completely ignored by the time of the First Contact movie, notably in regard to Picard's state of mind, and there are inconsistencies which aren't really addressed. I think at this point the idea was that Borg were still born and grown instead of being made up of all the species that they had assimilated.
