I just converted a 1992 Kona Lava Dome to an Xtracycle. As noted above, V-brakes are mandatory for the rear as there is no provision on the FreeRadical for cantilevers.
I ended up going with new v-brakes and levers (Avid Single Digit 7 with Speed Dial SL levers). Found that I had to upgrade my wheels because the rims on the old bike were totally worn out. But that gives me the opportunity to go with a dynamo front hub, which is something I wanted to do anyways, so no loss. The existing drivetrain is working OK so far, and it's actually nice to have oldschool Deore thumbshifters because they have friction mode - which gives some nice forward compatibility options for 8/9 speed rear cassettes.
Anyways, every way I sliced a Big Dummy build (using all new components) it came out much costlier than my Xtra conversion, and honestly I'm quite pleased to be able to re-use a perfectly good old frame and the majority of its components instead of buying new. And all the stuff I pulled off the bike, which is also in good shape, got donated to the local bike co-op which helped me get the X built up. So all in all I feel better about doing the X than I would've if I'd just bought everything new.
Honestly my wife has panniers and a rack on her bike, but there's just no comparison with the X in my opinion. The carrying capacity is simply much greater... you can do two or three errands in one swoop, like using a car, whereas the panniers make that a lot more challenging.
HTH,
Steve