j-z - sure am running this here at HN, it's working beautifully too.
The templates are easy, as - like WordPress - you design your structure and then it's just a matter of dropping the appropriate PHP calls wherever they're needed.
There's a (small) community developing plugins too, so it seems to be growing in popularity.
I was looking at alternatives like you were when I found it - all the good ones seemed to require hosting on external servers, with added expense if you wanted to self-host (assuming you could at all). So far so good, and it's free.
For small CMS solutions, there's also
Perch, if you don't mind a small purchase (no pun intended) which you can just charge your clients for development costs if you prefer. Perch is self-hosted, but you have to buy a £35 licence each time you create a site.
Haven't used Perch as yet, was quite close to implementing it for a client but came across Get Simple and went with that instead.