I do it.
It makes recording easy too. I have a fullrange PA/Amp (1X12 combo) that I run the POD stuff into too. For low volume stuff I think It's hard to beat. No, it's not going to sound like your amp. I think the sound quality is good, if a little digital. Also, it depends if you have all of the updates. Besides, "sound quality" can be subjective.
As far as I'm concerned there are only 2 ways to run the pod stuff (XTL, POD, TonePort, etc.)
#1 Through a fullrange amplified speaker system
#2 Into the poweramp section of an amp and guitar cab with the speaker sims disabled.
I hate headphones.
When I play through my stereo monitors it sounds exactly like this....
http://myspace.com/smanusa
I am not a tone wizard, I just dialed up something real quick on the software and played. Please forgive my playing. It's just a stock S2170 with dead strings and.....I suck.
So you could probably make it sound better...even I could. That was just my half-ass attempt at recording something with the pod.
I tried alot of differant stuff...
Vox tonelab, gt-8, etc. Overall the Pod stuff was the best. IMHO.
Nothing beats a Nice
tube amp.

I'd use a gt-8 with that though (3 cable method)
Hope that helps.