I own the POD XT and also a Line 6 Flextone III XL. I can say this: I'm more than satisfied with the tones of both, and love the flexibility and versatility of both.
Digital modeling gets a bad rap from alot of folks, and usually, it's from the folks who invest $2,000 on a boutique tube amp and still aren't satisfied with their tones. In other words, alot of folks have their minds made up before they even try them.
Line 6 products don't catch the tube amp thing 100%, but then again, it ain't a tube amp. It comes pretty close though in terms of tone, and they're not one-trick ponies like my 18-watter. That's not knocking my 18-watter as the tone is great, but the idea of getting 32 different amp models for a fraction of the cost is what sold me, especially considering the fact that the tones are excellent.
Guitars: 2003 and 2004 American series strats, Squier Classic Vibe 50's Strat, Squier Deluxe Strat.
Amps: Line 6 Spider IV 120, Vox AD50VT 212, and Peavey Transtube Bandit 112.
Pedals: Digitech Bad Monkey.