It is true that XLR is better at noise rejection, but the down side of the 500 & 500X is that the XLR cannot be switched between mic & line level output, like the 1/4" output can. I run my 500 & 500X straight into a Crown XL1000 amp, but when I tried the XLR (which I would prefer to do), found it could not provide line level signal that the amp needed to drive properly. With the 1/4" set to Line level, the amp gets what it needs to get proper signal out. I have been using the 1/4" out with a standard good quality 20 foot guitar cable with no bad affects.
From what I understand, the rack-mounted Pro & Pro X have the ability to send line level via the XLR, but I don't consider that a viable product for me, as other than a couple of differences between the 500 and the Pro, I'd need a rack, a Pro, and a foot controller added on, for a significantly higher price tage to achieve the same outcome from what I have now. If the XLR noise vs 1/4" was a biggie, I probably would have gone the Pro direction, but it has not been the case.
For mic level signals to a PA or something else with a pre-amp, XLR will be the best, as signal to noise levels are way more noticable at that volume level.
Note -- I do send to our soundman's board via the XLR out and I always lift the ground with the switch to avoid ground loop issues as Charlie pointed out...
My 2 cents.
Line 6 Gear - Variax 300; JTV-59, JTV-69S, Pocket-POD, POD XTL - (RIP), POD X3L, HD500, HD500X, HELIX
1966 Gretsch Country Gent, 1973 Fender Tele Deluxe, 1978 Strat, Epiphone LP Classic, Epiphone Special with P-90's
Gigging Amps: Quilter Tone Block 200, Crown XL1000; Yorkville NX35 Speakers