I've gotta say than in my experience (I track DI's with my POD XT so it's still going thru the POD's converters), even on the same settings, POD Farm 1 sounds MUCH better than my POD XT. Haven't tried POD Farm 2.
More 'depth' to the sound, less fizzy, a tiny bit less (I don't think this is the correct term, especially on an audio engineering forum, but for a lack of a better word) 'compressed' sounding. Overall, less POD-y sounding. That, and it has lots of cool features that the XT doesn't have, like two amps at once and whatnot.
Still sounds like Line 6, but a better, more up-to-date Line 6, I'm guessing.
I don't really know how it compares to a POD X3, but POD Farm, IMO, most definitely has the XT beat.