hi, I've been playing with the line6 nylon for the last 4 days, and I am fairly happy with it. It does have a nice feel to it, my only complain is a slight buzz on the D string, I guess I'll have somebody have a look at it.
The sound is really nice, and the 2 models it does (flamenco and classical concert) give you plenty of room to cover solo and comping styles, it is a more versatile approach than having an EQ, plus it has a very subtle built-in reverb and compressor that are just usable, but certainly good enough for playing live. And I think that it is exactly the strenght of this instrument, a very light, easy to play, feedback free nylon guitar. I find its "amplified" sound to be more realistic than that of more expensive nylon electrics I tried (Cordoba, Takamine, etc).
Having said that, I had to do a bossa recording this week, and just for fun I tried the line6 thru a purple audio biz preamp directly into DP. I was very, very surprised indeed to find myself liking the sound that got recorded. It sounds almost as a real acoustic box recorded with a mic.
In short, I've never been a fan of line6 products. I own very nice guitars and amps, (gibson ES-175, a 74 strat, Godin LGXT, etc) and hated the Variax series of guitars, just did not like their modeling. So when I first saw this guitar, I almost did not try it, but luckily I did.
I still want to try the Godin Multiac series, but haven't found anybody carrying them here in Miami. However, even if I got the Godin, I might just as well keep the $500 line6 nylon.
About the Yamaha, haven't try that one.