Well, it sure is a popular diet, and for a couple of reasons. (1) We americans tend to like extremes and (2) it works. But will it hurt the body? Obviously, doing a 500 calorie diet is going to promote weight loss. But does the HCG really trigger the body to selectively lose non-essential fat, while sparing us from catabolizing our muscle? The answer is a definite maybe!
I have known, or witnessed in clinic, at least a couple dozen people do this program. Many of them lose a lot of weight and feel that the diet was successful, others not so much. I'd say that more than 50% were very successful. Which is good. However, I don't think it is a great diet for building a life long health and diet plan. It is impossible to get all of the nutrients your body needs to function (and not have cravings) on a 500 calorie diet, unless a low-calorie, nutrient-dense supplement is used, like a good green food. I'd rather see a nutrient-dense smoothie, low-carbohydrate, meal-replacement type program.
For 2 million years the recipe for health has been the same: a hunter-gatherer program of lean/grass-fed/wild game types of animal protein and wild fish; produce - primarily vegetables, some fruit, being conscious of the high glycemic food that should be avoided; very minimal grains and dairy, if at all; no sugar. It is very important to remove sugar and the foods with the highest potential for immune reactivity. And, exercise like a caveman - low stress cardio (long time, not too strenuous) and short bursts of (relatively) intense activity. There is simply no substitute for the major lifestyle pieces - diet, exercise, sleep. Okay let me step off my soap box and continue answering your question.
Now that most of the HCG is homeopathic, I would rather see the real stuff used, because it will lower the risk that your muscle is catabolized for energy. I am not averse to homeopathics, but in this case I just think the actual hormone would be the best way to go. The difference of my soapbox vs. HCG is that the paleo way will promote many positive biochemical changes.
If HCG is used as a jumpstart, okay. But it certainly doesn't substitute for an optimal lifestyle and good medical work (testing for respiratory problems - sleep apnea, etc - monitoring blood sugar, testing deficiencies in energy production (Kreb's Cycle organic acid testing), etc, etc). A lot of people with chronic weight issues also have leptin problems. Leptin is the hormone that tells us when we are full/hungry. Some people have problems with the cell receptors, which can be helped, and others have a genetic problem making the hormone, which is a bigger uphill battle.