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The result of having so many parties compteting within each electoral district is that many "strategic" votes were cast where voters picked not their preferred party, but rather tried to prevent their most hated party from winning by voting for their closest competitor.
Now, PR would eliminate this type of "reluctant stategic" vote because we could vote directly for our preferred party with the assurance of having our vote "count" towards seats in the House of Commons.
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I think Instant Runoff Voting solves many of the same problems, but without the hurdle of changing from geographic representation. It also has the same benefits such as increased power of 3rd parties and less negative campaigning by the candidates as they try to become palatable to a greater section of the voting public.
http://www.instantrunoff.com/
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Yes, I've seen this as well. However, you will notice that there is still a problem with parties getting, say, 5% of the popular vote but no actual voting power among the elected representatives. They just get knocked off in the early stages and defaulted to the "next best" option. I would prefer to see representation for all favored options in the House of Commons.