My title virtually states everything. I've been searching at mod_pagespeed also it in some way impresses me to be very nothing more than a method to offload the job of optimisation towards the server rather than the developer.

There might be some benefits of carrying this out for example reducing developer time etc so I am not recommending that it's all bad. It does strike me as a little of the script kiddie method of doing things. Instead of find out about all individuals performance techniques, hey! just allow the server get it done!

Is mod_pagespeed something that might be good to implement on my small production web application or would I be best doing the optimisation "manually"?

This is actually the original announcement.

It appears in my experience that could empower the server admin to centrally optimize content produced with a large group of designers. Also, maybe it's a great way of baking in certain well-examined (by Google) guidelines that could be pricey to build up by yourself.