In some Volcanically active areas of the world, steam actually comes out of the ground. This can be in the form of geysers, although these are not a very common thing.

Most electrical generation involves the turning of a turbine.  One of the main ways this is done is with steam.  The presence of steam coming out of the ground avoids the need to heat water to make the steam.  Most of the geothermal electricity actually being made now is of this type although there is much more potential for Hot Rock geothermal power.

Volcanic steam and hot water have been used for a long time.  Certainly at least 10,000 years.  They have been used to generate electricity since the early twentieth century.  Once set up, these geothermal power plants are Carbon neutral.  The power can be very cheap.

Problems

Of course anything people do can have effects.  If anyone came up with a way of making power and claimed that there were no problems, I would be looking closely at the claims.

Organisms

It is now known that hot springs contain heat tolerant micro-organisms.  Study of these has started and there is a strong likelihood of products useful to Humans coming out of this research.

Using the steam for power generation will certainly affect the environment of the organisms.  It is entirely possible that some potentially very valuable one could become extinct.

Geysers

Geysers are a fairly rare natural phenomenon.  In some areas these have stopped because of changes people have done to maximize the power generation. 

Yellowstone National Park has more geysers than any other place in the world.  I hope we never destroy these.

Sources

http://iceland.ednet.ns.ca/schedule.htm

http://www.dailyreckoning.com.au/geothermal-power/2007/10/31/

Geysers

http://www.uweb.ucsb.edu/~glennon/geysers/

http://www.martinfrost.ws/htmlfiles/june2008/geothermal_power.html