I was considering a modeling guitar for a while and thought about this one. I've tried both the Line6 guitars and this VG Strat. They each have their pro/con.
The VG Strat is a better-made guitar and more familiar feel which is nice. However I think that they made a couple of key design decisions on this guitar that make it a no-go for me. The biggest issue is that there is no battery eliminator. This means that you will need to put fresh batteries in for nearly every gig. The batteries last 10 hours according to their specs, but this would be a big pain to have that to worry about at every gig. However, the sounds and features of the guitar work great. I especially like the re-tunning features. I would use that for slide especially. The other knock I have with the guitar is that they didn't model a Les Paul for the humbucking sounds. They modeled a Strat loaded with a Humbucker. This seems kind of lame. They should have modeled a Les Paul and 335 in my opinion.
The Line6 Variax's biggest weakness is the guitar itself. It doesn't feel as high quality as the VG Strat. (But I didn't try the Variax 700 which is supposedly the best one). However, the Variax has some great features that they should have put into the Fender VG Strat, IMO. First, it has a battery eliminator so you don't have to worry about keeping fresh batteries on hand. In addition, they have a separate output on the guitar for acoustic sounds. This allows you to send one output to your amp and the second output to the PA for acoustic sounds (for example). That's a great feature if you plan on going from acoustic to electric tones alot. Lastly the Variax has lots of good Les Paul, 335, and Jazz box models in addition to the Fender tones. I think that VG Strat does a better job of the Fender tones but the Variax sounds fantastic for the Gibson sounds.
In my opinion there is not a perfect modeling guitar yet, but they're getting closer. If Fender would fix a few things then they would have the clear winner. They already build a good guitar, now they need to take a look at what people would use the modeling for and nail it with some usability features. They almost have it.
-- Jim