Vibration
When I first got my bike anything over 45MPH would vibrate my teeth out, make my vision blurry, and parts were breaking off the bike. Everyone kept telling me that if I didn't like the vibration then I picked the wrong bike. That the vibrations were part of the character of the XS.
Now after fixing the wheel alignment, new chain and sprockets, tensioners, guides, synced carbs and tune, and new pipes I can ride 80MPH with a vibration that is more tolerable. Things are not breaking off the bike and I can ride a hundred miles a day.
I think when people complain about the vibration, maybe it's because there is something wrong with the bike. The bigest thing on mine was the chain alignment. After fixing that my bike smoothed out and it became a real nice ride. Still vibrates but it's totally different than when I got it.
Electrical
I'm pretty good at electrical. I figured things out pretty well. But the stock XS650 electrical system is a rats nest. It doesn't have to be this complicated. People kept saying that the stock electrical system is fine. You just need a battery tender, make sure the brushes are good, keep connections clean, and re-solder the TCU, get a stronger larger battery and it's all good. Easy as that.
Just save yourself some pain and go with the PMA and Pamco. There is a reason why they are so popular. It's because they are so much easier. I don't even need a battery let alone keeping it charged so the bike will run. Best money I've spent on my bike. I was fighting my electrical system for a month. After installing the PMA/Pamco I was running in 10 minutes. I haven't had a single problem since.
Carbs
Carbs were the easiest thing I've done so far. It's best to clean them up, replace anything that's bad, and set them to stock. I have pods and baffled pipes with stock jets. It runs pretty good. Be sure to sync them to improve vibration. I went with the BS38's on my 81 because it came with them and the BS34's were not in good shape. The carb guide helped a lot. Also make sure your electrical is good before blaming the carbs. I had fouled out plugs and low battery when I was working on my carbs. After fixing the electrical my bike ran great. Use good gas. I'm getting 57MPG right now.
Clutch
The clutch on these bikes can be maddening. Finding neutral is impossible unless you are rolling or the engine is off in a lot of cases. There is a cold and hot adjustment and you have to keep dialing it in as you ride.
I have replaced the clutch lever, cable, worm gear, clutch rod, clutch pack, thrust bearing, springs, HBB's hydro clutch, and 20/50 motorcycle oil. Nothing has improved the clutch. It either slips or it grabs. I have shaved the clutch lever to get more pull but I still can't get neutral when idling in gear.
Getting neutral isn't really my problem. It's if I don't get it into neutral or first before slowing below 15MPH, then I can't get it into first at all. I have to take off in second until I can get it to coast enough that I can get it into first. 15MPH seems to be the magic shift before you go slower number.
I have also found that it's much easier to shift without the clutch. I'm sure it's not the best for the bike though. Especially downshifting. I can downshift easy but if I do it too soon it will skid the rear just a bit. I guess getting the timing right will help with this.