I don't have Tiger yet so can someone answer this: does defaults read/write still work with these binary files or is there now a more convoluted method required to change an apps settings from the command line?
I any case it sounds a lot more difficult to determine exactly which parameters you need to set with defaults without first converting it in the way described above.

What are the chances that in the future they'll remove this ability by making the binary format as cryptic as .DS_store?

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So, I said ... well, I can't actually remember exactly what I said. But it was one of the most enormously cruel and frighteningly witty put downs ever.

Yep. Defaults works just fine.