The Film Developing Cookbook by Stephen Anchell and Bill Troop say it all. "XTOL is the fist patented developer formula from the US Kodak Research Lab to claim a speed increase. Fine grain and sharpness are also improved when compared to D-76 and T-Max developers. XTOL is now the developer most highly recommended by Kodak for T-Max films. It has been observed that dilution increases speed and sharpness with XTOL. Dilutions of 1:3 or more are frequently recommended. At these dilutions XTOL is effectively a nonsolvent developer, but because of its careful buffering, grain is still fine."(posted 8180 days ago)Kodak no longer provides charts for dilutions greater than 1:1. Over a 4 year period my failure rate with the product is much less than 1% using dilutions of 1:2 with mostly 120 film.
D-76 may not make it to market if developed under current enviromental standards. XTOL's ultimate advantage is the reduced environmental impact to the environment and humans. It works great on 120 Tri-X/Verichrome mixed 1:2 and 135mm FP4m mixed 1:1. It's a perfect balance of sharpness, grain, tonality. 120 Tri-X is sharp sharp sharp when cooked 1:3 with XTOL. By diluting, you get different looks.