I find it interesting that this is a completely different conversation than the one started by this article on the USCF web site a couple of years ago (and continued in the forum discussion there):
http://main.uschess.org/content/view/7854/381 I guess that's because this thread is mostly from the perspective of professionals like GM Kosten, while that discussion was mostly from the perspective of amateurs. Also, as mentioned several times in this thread, the US treats Swiss tournaments differently than in Europe.
Here in the US, withdrawals are normal and common place. As long as the person withdrawing tells the tournament director they're leaving, they simply won't get paired for the remaining rounds. And since cash prizes are usually split between all finishers who are tied for them, the tiebreaks don't matter, unless there's also a trophy involved.
I actually remember one time that a friend of mine tied two others for first place in our section of a big tourney, so they split the first, second, and third place cash prizes evenly between them. But my game at the bottom of the section was the last one finished, and my friend got annoyed with me for drawing, because he would have gotten the trophy on tiebreaks if I had won, even though I hadn't played any of the top 3 guys that tournament. I'm still not sure exactly how that worked out, but I'm assuming it had something to do with who my final round opponent had played in the earlier rounds.
And when I say that withdrawals are common place, I'm talking maybe 20-30% of players in any normal weekend adult amateur event will drop out before the final round. The only problem is that some of them forget to inform the TD that they're leaving, so their opponents get stuck sitting around for an hour before claiming the win (USCF rules). Some of the better TD's do keep "black lists" of players who cause those types of problems, but it usually doesn't keep them out of tournaments altogether. They just might have restrictions like "You won't get paired for the final round unless you specifically tell me that you will show up this time."
As an amatuer, my big complaint about the Swiss system are similar to the USCF article I linked. Pairings end up being lopsided. In open tournaments, players in the middle bounce back and forth between playing guys rated way above them and those rated way below them, rarely getting games against those around their own level. This is why I prefer the really big tournaments that are divided into sections by rating ranges - I know I'll get to play guys within 200 points of me in more than half my games, which doesn't happen in non-divided tournies. I even remember one tournament when I first started playing, when I was rated 1250, and my lowest rated opponent was in the 1600's, despite the fact that there were 1100-1400 level players there who I probably would have enjoyed playing against. Not surprisingly, I lost every single game, and I was so discouraged that if I hadn't already pre-registered for another tournament the following weekend, there's a good chance that I would have given up this hobby right then and there.