You will NOT find more versatility anywhere...
Disclaimer: I am a Line6 endorsee... however, there is NO written agreement that I must talk nicely or talk at all about this product, so this review is my own opinion apart from that very casual "business" relationship. I have highly recommended Line 6's products for years, and this is the one I've been most happy with, at least initially. Also, for the way I do music ("two-voice guitar") this guitar ONLY works well for me with the POD HD 500, so I have only really used it in that context.
This guitar is not for everyone. If you are looking for an absolutely perfect rendering of all the guitars, played by themselves through a great amp, with every facet of the sound perfect... that's impossible. If you have the money, just go buy the dozens of guitars that are modeled in here. If you are looking for great sound in the mix with the band, and need to play a lot of different guitars, this is for you. So I'm weighting this review towards that second person, and giving it 5 full enthusiastic stars.
You can NOT find more versatility in an instrument than in this guitar. All of the different sounds are very convincing, the ability to fine-tune them with the Workbench software means that you can change them even beyond what is available (including some really "wacky" pickup combinations that you'd NEVER find or install in a regular guitar, but can try out with this one rather easily). Tele? yup. Acoustic? Oh, yeah (although there is a strange "mid-range hump" that you have to tame with eq... not much different than a piezo equipped guitar, and easily done with a combination of "virtual mike placement" in the Workbench software and EQ in whatever you are connecting to). The magnetic pickups sound great to my ears, too. Blending two sounds, either two different electric sounds (mags + modeling) or an electric and acoustic, with the HD 500 is a WHOLE lot of fun.
I like the Tele model a lot, the Gretsch model, and the Strat. The 12-string Rickenbacker is an insane amount of fun as are the acoustic 6- and 12-string models. Those and the built-in magnetic pickups are the ones I'm using the most, although I am OFTEN using the built-in magnetic pickups with an acoustic model, processed separately. One thing! The octaves up on the 12-string guitars (especially the G) have an occasional odd warbling issue that really doesn't affect how I play, except for 12fret harmonics (which are sometimes an issue). Line6 has hinted that this might be addressed in the imminent software update, so I'll give them the benefit of the doubt and edit this later if needed. (Even if they don't fix that, I'm still enthusiastic about my 5-star rating.)
There are very few "what is up with that" "blemishes" found in my sample, such as a tiny finish flaw on the back of the neck (that I didn't even notice for about a month and doesn't affect playability) and some weird grooves in the fingerboard right next to the frets, which you also have to look really hard to even find. These are the kinds of things I'd never expect to see in a top-quality US-made instrument. However, the instrument more than holds up with others in its price class, including US-made Fenders (my Variax is the Korean-made one, not the US-made one, which I have not even seen). The weight is a little less than a good Les Paul (there is a LOT of wood routed out for the electronics, so it's similar to a chambered Les Paul). The neck is pretty chunky, like a 50s Les Paul neck. Just the way I like it.
The guitar plays, handles and balances very very well. The action and setup were spot-on when it arrived. I only needed the tiniest neck adjustment after a few weeks (totally to be expected in a mahogany instrument that moves to a new climate), and I raised the action just a smidge (I like my action higher than many). The fretwork is outstanding, the neck is totally straight and level, and the quality of the hardware seems to be rock solid. There have been some reports of the knobs and switches giving problems on early units, but I waited a year after they came out, and my instrument has no issues with any of those things. (I will admit, however, that I think the knobs are butt-ugly up close, but look fine from normal distance.
The VDI cable is a minor pain to plug in (you really can't strap on and then plug in, the guitar gets in the way of itself and you have to open a "door" and then plug in the VDI cable), but once you have it plugged in, you're good to go. With the HD 500 this is a REVELATION in tweakability and sound variation. Running the Workbench software will probably be necessary for anybody, as I had to equal out the levels of the different models (to my taste) and raise them to match the volume of the magnetics (which I lowered a lot... because I like my pickups low off the strings.) Also, with the Workbench software, you can create any pickup combo you can imagine (as long as it's only two pickups, you can't do three or more). two humbuckers in the exact same spot? no problem. A lipstick pickup and a Filtertron at odd angles out of phase on a hollow-body Jazz box? No problem... I think this might be a cool guitar for somebody experimenting with odd sound combos to figure out if they want to buy a specific guitar. I think the sound combinations on this guitar might be nearly infinite, but most of us will go with the tried and true.
One small thing. I am a guy that likes the pole pieces on my neck pickup "out" a bit and the ones on my bridge pickup "in" a teeny bit. Somebody at Line6 must agree with me, because that's how my guitar arrived, which is nice, because the pole pieces on the pickups seem VERY stiff compared to other guitars, and I appreciate not having to adjust them.
Lastly, some have reported an issue with "palm-muting" strings, and indeed, when you palm mute on this guitar (when using the modeling sounds) you have to adjust how you do it, because it responds differently than regular magnetic pickups, especially with very high-gain sounds. I don't use those high-gain sounds and can report that I have very little trouble with this issue on the electric sounds, but a little bit on the acoustic sounds, where I find I need to adjust more. Line 6 is apparently improving this for the next update, but even without that update, I am still satisfied with the way this works on my guitar. You should definitely check this guitar out in person if you can and see if this issue is one that does or doesn't affect you and your playing style.
I can't highly recommend this product enough!