We arranged a private tour of Niagara Falls and other nearby sights and had a fairly satisfactory experience with BG Tours. Our tour guide Joe was very good and personable, knowledgeable about the history of the Falls and other sights, and knew the Niagara area like the back of his hand (seeing as he lives there, we would expect no less!). The only hiccup with BG was that we had arranged (and paid) for the Hornblower Cruise and they had made an error and forgot that part (which is why I give them 3 stars instead of 4). We cleared it up quickly on the phone -- for which I give credit to Robert of BG -- but our great thanks to Joe who not only covered for BG and got us the tickets -- but also sweet-talked (or fast-talked) the security guards into letting us cut into the lines, thereby probably saving us 45-60 minutes of queuing!
We were a party of 5 and it definitely was worth paying the extra upcharge for a private tour --it made the tour very comfortable and most importantly, flexible, so that we could stay at whichever part as long as we wanted to and tailor the itinerary as we wished. If you have a large party (e.g. say 6 or more), I would say this would be a cost-effective and highly convenient way to go.