I can't really speak as to the difference in quality with the Insteon products. I've never had one go bad on me, but I never really had any X10 units go bad on me, either (well, I had some WS467's that would turn on by themselves, but I hear that was a common occurrence with certain types of line noise).
I had two older Switchlincs go bad on me, but they were pre-Insteon.
They are more expensive, but at the time, Smarthome didn't have any X10-only switches, and I wanted to replace the WS467's that were misbehaving. I also wanted relay type switches, so I could switch to CFLs for my outdoor lights.
Once other thing to note, however, is that the X10-only switches from Smarthome only have a 90-day warranty. The Insteon ones have a full 2 years. It looks like the X10-only ones are around $20, while the Insteon ones are around $46.
If one of the less expensive switches fails after 90 days, but within 2 years, you've just about paid the difference (if you count shipping costs). Not that I expect the switches to fail, but I kind of wonder why those only carry a 90-day warranty on them.