What is the difference between the X3 and the HD? I just ordered a desktop HD, but I have 30 days to change my mind if there's a reason to. I was assuming HD was the latest and greatest, at least as far as sound quality?
Nice! Yes, the HD is the best of what L6 has to offer in terms of amp models. I have the HD500, and it still sounds awesome four years on. The HD amp models were created from the ground up, and sound (to my ears) much better than the previous offerings. I literally sold my X3L to a bassist to help fund the purchase of my HD500 back in 2010.
The X3 was the same as the XT, in terms of the amp models. The main difference, is the X3 series coagulated all of the existing offerings from the XT bass and the XT guitar, into one package, including mic preamps, etc.
The 'new' AMPLiFi gear apparently uses the older amp model technology, which came as a bit of a shock to many folks around these parts (myself included).
Some other things to consider about the HD gear - which may not mean anything to you *yet*, but down the road, if you choose to go this route, you will able to connect a Variax, like the James Tyler Variax guitars, to the POD HD, and power the guitar via the VDI cable. Also, the HD series introduced the Line6 Link function, so if/when you get an urge to look into the DT amps, or StageSource speakers you can do some awesome stuff there.
Those two items are unrelated to your current needs, so I won't go on extensively about them - but, for me, it was four years of using the HD500 as a recording interface, plugged into small desktop type speakers, and sometimes into the FX return of my various random solid state amps. Earlier this year, I got a DT25 1x12, and it really does a great job of bringing the HD amp models to life; the partnership between the Bogner tube amp and the Line6 digital models is quite effective. Then, I went down the StageScape / StageSource road, to start building a PA system for my band to use at gigs and rehearsals, and it's also an amazing interface to use with the HD gear.
So, in general, with just the HD you will be happy as heck, and then if/when you want to look into the JTV, the DT, or the StageSource gear, you will already have the starting point in place.
Cheers! And have FUN