The Bass POD XT is replaced with the POD X3.
Or it is in the proces of replacing. A lot of stores still have XTs in stock.
I bought myself and X3 recently, but I also have a bit of experience with the XT and the original POD.
I'm guessing the XT is right for you.
I got the X3 because of the new features (bells and whistles)... the two tone setup (I love that very much)... also: I can use it for guitar.
Check out
www.line6.com and compare the difference.
The X3 also has a lot more effects, but to be honest not much usefull for bass. Most of them are intended for guitar.
What I liked in every POD is the fuzz modelled after the Big Muff. I even like it more then a stompbox fuzz.
On the XT versus X3: I heard that some bassists are not welcoming the X3 and are quite happy with the XT.
Other then extra weirdness, the X3 doesn't offer more then the XT to a serious bassist. (I'm not a so serious bassist.

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Connecting: I have two XLR outs and (not now, in the future) they go into a poweramp (stereo) to two cabs for tone 1 and one cab for tone 2. (Click link in my sig. Do it. DO IT.

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So I use my POD as a preamp. I have no experience with a POD place before an actual bass amp. But I assume you can just use the 1/4 unbalanced out to your amp, amp set at flat settings.
IMO; the speaker simulations...

not so usefull. Maybe when used in direct out to a recording device or PA. But I don't use it. I'll probably keep mic'ing the cabs after the poweramp.
Only the Acoustic 360 18" simulation seems to do something special to your sound. Other then that, I don't use speaker simulation.
This is personal, maybe others like the speaker simulations.
BTW, great DI sound without speaker simulations are possible.
Yes a POD demands a lot of tweaking.
Also, have to throw this in, SUB DUB. The best feature in Line 6 PODs.
I hope I was somewhat helpfull.
Do you need to know something more specific?
(BTW: also at least two members on this board with more experiencs then me with POD, maybe they chime in.)