I've actually had a player use one of those before. It went pretty well, if by 'well' you mean 'took over part of the globe'.
These charming (hah!) worms are Fine-sized magical beasts, whose 1/4th of a HD can be swapped out normally. Ability-wise they take a massive penalty to strength, but receive bonuses to dexterity, intelligence, charisma, and especially wisdom. Movement speed is terrible, their one natural attack sucks, and they definitely don't have limbs, but the special abilities definitely outweigh those disadvantages.
Said special abilities, roughly in order of desirability, are Hide Mind (immunity to divination spells that'd reveal you as psionic), 60 ft. Blindsight, 20 ft. Telepathy, some PLAs that we'll get to later, and finally Enthrall.
What does Enthrall entail? Well, it allows you to dominate any charmed creature you're in contact with. Additionally, orders that go against the victim's nature can't allow it to break free, and the entire effect is completely nonmagical. Furthermore, the puppeteer's Host Protection ability allows it to use its opponent's saves and gives ranged attacks against it a random chance to hit the host instead.
It's not entirely clear whether this effect ends when the underlying charm ends (as opposed to lasting as long as physical contact), but if it does then that's obviously a significant limiter on the power. You can get somewhat around this by just taking levels in a caster class (as you were probably going to do anyway) and manually using Charm powers, or (arguably) by taking Practiced Magic from the Shackled City hardcover and just augmenting your innate charms to last for days.
The SLAs are interesting but limited: 3/day Mental Barrier, Detect Psionics, and Psionic Charm have their uses (especially together with Enthrall), but aren't too impressive. The fixed CL of 1 doesn't help.
While Enthrall's wording isn't the clearest, the package of great mental boosts, Fine size, Telepathy, and a few nifty SLAs seems to justify a positive LA here. Sure, not having limbs sucks, but it sucks a lot less if you're going to be a caster and also get a dominated proxy body to stack your loot on.
Having reviewed community feedback, the LA shall be +2. DMs should keep Enthrall in mind, but it's not game-breaking to the extent that it needs an asterisk.