A few cons for me in relation to the 3500: no album art through the iPod dock, firmware not upgradable, no HD radio (minor gripe). I still think having a second component zone offsets these though, for me.
I love being able to watch sports or play video games while listening to music, but that is almost impossible to do now. My current Yamaha does it with background video, but they've removed that from their newer models. With the 3500 I can run the cable, wii and ps2 through the receiver via component (HDMI for BD and HDDVD) and be able to watch it over HDMI in 'Zone 1' or over component in 'Zone 2' while listening to music.
FYI, the sonystyle site lists the 3500 as having 5 optical audio in (1 front) and 2 out. But the pics seem to show a unit with 4 in (1 front) and 1 out. Maybe I am missing something. I did a chat with their tech support and was told it is 5/2. We'll see.