I stopped taking melatonin because I'd wake up extremely groggy. Although I also have a (bad?) habit of covering my eyes with a pillow or the corner of a blanket AND I have a light blocking shade in my room, so I was basically waking up in complete darkness. One thing I considered to counteract this was plugging a lamp into a "vacation" timer and having it fire up around 7a or 8a or so. I think I'll stop at the hardware store and give the whole setup, melatonin and all, another try after reading this post.
Here's a thought: use the melatonin and wrap a scarf around your head before going to bed, but leave the shade up or loose. The melatonin & scarf will put you to sleep, and sunrise around 6 or 7 will slowly wake you up, since by then the melatonin will have run out and your scarf will have come off.
Full essay: http://www.gwern.net/Melatonin