I *personally* think it looks like a waste of money. I have the regular co-sleeper and I never thought it smelled like chemicals.
The cocoon has a weight limit of 15 lbs. My son was 15 lbs at 3.5 months, which wouldn't have allowed us to use the cocoon very long. You also have to stop using it once your baby starts rolling over, which you have no idea when that will be. I love that I can use the co-sleeper bassinet for a long time: it's used as a bassinet next to our bed, I will eventually move it to the living room for a play-pen of sorts, and I will use it as a travel bed (I've used it for all of those things already for DD).