There are three downsides to XWF, as far as I see it;
1. Unintuitive interface.
2. Lack of customisation that (for example) EnScripts allow.
3. No free acquisition tool (unlike it's most popular competitors).
Just a quick note about XWF - it's true the UI doesn't fit with what most EnCase trained examiners expect, however, once you've carried out the three day training course, the UI becomes second nature and actually very intuitive. The guys at X-Ways have spent a lot of time making the UI easy to use, but you need someone to explain it to you so you 'get' the design.
The latest version of XWF now ships with X-Tensions, which is a way of programming your own DLL in whatever language you like to extend XWF's capabilities. The API is solid and there are a lot of useful additions coming down the line.
With respect to acquisition tools, do they need to produce one? FTK Imager is probably the best and most widely used forensic tool available today, so stick with that!
A couple of other very compelling reasons to try XWF is that it is considerably cheaper than either FTK or EnCase. This is not because of reduced functionality - it's more like X-Ways are not gouging enterprise level customers as the other two are. Closely tied to this is the outrageous levels of hardware you have to throw at either FTK or E7 to get them to perform even adequately. XWF will run fast and remain stable on much lower spec hardware.
Finally, the X-Ways team release updates and optimisations very regularly, with beta versions of the next release available to all registered users if you're interested in having a play. They respond quickly and well to user feedback and provide the best value for money in the current market.
I use XWF as my primary tool followed by EnCase 6. As most others in this thread have described, EnCase 7 is not fit for purpose and doesn't get a look in.
I have no association with X-Ways other than as a very satisfied customer.
Unlike my very dissatisfied association with Guidance as tester for their buggy software!