Personally, my favorite thing about being a Kennel Tech is caring for animals and knowing that I'm making their lives better. I think the thing I dislike the most is getting attached to an animal just to have it go to another home, although I'm always happy when they find a good, loving, permanent home. Either that or having to put an animal down, even though, from what I've seen, that's only done when either the animal is horribly ill or injured, and it's kinder to end it's suffering, or when the animal is vicious and a danger to itself and others.
As to whether it's challenging or not...well, that all depends on who you are. Can you work quickly and efficiently? Are you thorough in the jobs that you do? Can you deal with little to no sick leave? Can you deal with getting attached to an animal, or many animals, just to watch them go to different homes, and probably never see them again? Or, worse, have to put down animals when they are ill or vicious? If you can deal with these things, then no, it's not really challenging, although the fast pace and daily demands generally keep you on your toes. Also, be aware that there will be times when you are busy or rushed, shortly followed by times where there is almost nothing to do, so also be prepared for varying levels of activity.
As a kennel tech there is always something new to learn. However, as to opportunities to advance...well, that all depends on where you work, and how many co-workers you have. Usually, as with every job, there is an opportunity to become something like a kennel manager, or a kennel supervisor,(unless it's at a pet store, then it's just the average manager and supervisor positions) and from there...well, it depends on whether or not you want to divorce yourself from actual, regular interaction with the animals or not.