The cut-off is stepped, as you described, and I would say that it is sharp and in focus.
I had read somewhere where someone was talking about how great the color band was on some projectors, but hadn't thought of it as being particularly desirable. From my perspective, I'd rather they just look as much like what came on the car as possible because I don't want any grief from the local officials. That, and I am typically a little distracted by oncoming drivers that have distinctive-looking headlights.
In fact, getting back to the point that my own headlights are as bright (and desirable?) as the ones on most of the other cars is one of my main reasons for wanting to upgrade. If I take my car out on a solitary road on a dark night, honestly the stock halogens don't seem all that bad, but as soon as my eyes get desensitized by the bright lights of oncoming traffic, or when I find myself driving in my car's own shadow because the car behind me has so much brighter lights than mine, I feel I need to be more competitive just to stay safe.
Yes, the color band and flicker effect is purely subjective, and will cause some notice, however, they look about the same as most newer OEM HIDs. If your lights are properly aimed, you shouldn't have any problems. The only advantage of the flicker is that it seems to cause oncoming traffic to be more consciencious in dimming their lights. Don't know, but maybe they've been flashed with bi-xenon HIDs before and it's a kinda of Pavlovian response?
Other vehicles will not wash out your view of the road with FX-Rs.
My experience with stock halogens wasn't good.
Here's what I've gone through:
1. Tried Silverstars - tiny improvement (not worth the money)
2. Tried a Phillips high $ halogen - about the same as Silverstars.
3. Polished the headlight lenses (tiny improvement)
4. Bought new headlights (tiny improvement)
5. Installed an H1 HID kit (small improvement - still not enough)
6. 1st retrofit -Mini H1@ 35 watts (huge improvement like 300%+)
7. 2nd retrofit FX-R @ 55 watts (large gain in width, noticably > range)
8. 1st leveling motor range control (can get the most out of the HIDs)
9. Tried the FX-R 2.0 (not as good as the original FX-R)
10. Months of testing and countless revisions...
11. Waiting of the FX-R 3.0 to arrive.
I never found the bug's halogen headlights to be much good, especially the lowbeam. The stock halogen lowbeam gave at best 200' of usable range (2 seconds or less @ highway speeds), and barely 25' of usable width.
With the FX-Rs, my lowbeam gives me 400-500 feet of usable range and at least 200 feet of usable width, probably more. And if there's no oncoming traffic, I've got 10 seconds + of usable range in front of me @ 70mph, all the while lighting fence row to opposing fence row.
James