Just saw this thread. I have been riding a motorized Xtracycle for over 2 years as my daily driver, about 5,500 miles. I frequently load the crap out of it. The only thing I have done with the frame is to use a larger washer where it connects in the front; I think that is necessary but no big deal. Also, I am pretty sure the rear wag comes from the wheel spokes and not flex in the frame. The frame looks way too light to be cantilevered that far out the rear, but I can tell you that under anything even closely approximating normal use for this setup, it works great. I have the Stokemonkey setup which I recommend (but is currently not available, should be soon). Xtracycle has been in the business a long time and I have talked to them on the phone several times. The frame is made overseas, but guess what, so is damn near everything we are using. I think they have shaken pretty much all the bugs out of it by now.
One weak point with the rest of the set up I have experienced is that the plastic buckles on the bags will break eventually if you really load up the bags frequently, which I do. I had the retailer where I got the Xtracycle say they would ship me metal replacements for free, but I would have had to rip out the stitching to the bags and re-sew to replace them. In the end, I just used a piece of aluminum wire to hold them together. It works fine but stronger buckles would help I think.
Lastly, re-running my cabling for the rear derailleur so far back has made the rear shifting sloppy with my indexed shifters. In some of the literature, they mention potentially going to non-indexed shifting. Some people with better shifting hardware may not have this problem, but I have found that I lose one gear due to bad indexing no matter how I tune the derailleur. With a motor, however, it is not that crucial to hit a particular gear so it is not really much of a problem.
So I'm pretty satisfied. I have carried unbelievable amounts in both volume and weight on this bike. It is pretty hard to beat.
I would not recommend a conversion to 700c (which I have) actually. The tire is very close to the front of the frame and it is tricky to fit a fender on the rear. However, if you have to use a 700c frame, it does work.