Today Valium is still prescribed, most often as the generic version diazepam. A friend of mine is taking it for severe muscle spasms. It can indeed be effective for treating anxiety. And unfortunately, it's often sold illegally. Because abuse or prolonged use can lead to addiction, Valium is a Class 4 controlled substance in the US, and patients can't get refills - they have to have a new prescription each month.
Anxiety and muscle spasms aren't the only uses for diazepam, and there are some important cautions and warnings. Here's an in-depth look at Valium/diazepam.