Enormously flexible, but starting to show it's age a little now. Has great potential but missing some cutting edge features that are already incorporated into other Steinberg instruments, for instance the resynthesis engine from Backbone, the ability to split noise and tonal componants from Groove Agent, and then there's other aspects that I'd like to see that would make life easier within the UI, drag and drop modulation sources that are starting to become norm in many instruments would be really useful too.
If you're after soundpacks then Halion is pretty lacking in this area, Kontakt has pretty much cornered the market, so if that's what you;re looking for then I'd go with that. But if you want a powerful instrument that can handle all types of synthesis as well as being a solid sampler, with awesome integration for Cubase then this is a really good option. It can handle opening some older format Kontakt libraries, but I've not had much luck with much of these.
Steinberg's HALion is marketed as a "VST sampler". Unfortunately, it is anything but a sampler. HALion can't record samples, lacks waveform editing, and even lacks sample drag & drop to/from a VST host.
Perhaps in the early days of VSTi's these kinds of limitations in a software sampler were acceptable. That certainly isn't the case now. I think we all expected that HALion and Kontakt would be rounded out with these critical capabailities by now. After all, what good is a sampler that can't even sample? If HALion provided proper drag & drop of sampled material the lack of sampling and waveform editing might not be so crippling. But as things stand, HALion is really only good for loading and playing sound libraries. It is certainly not a "VST sampler" as Steinberg claims.
HALion also has serious problems in the file management area. HALion saves Programs by saving separate files for all of the constituent sample files for the program. This leads to a big tangled mess of files on your hard disk. HALion does provide a ".hsb file format" which saves bank contents to a single file, but be warned that once you save your bank as a ".hsb" you will be unable to access your samples outside of HALion!
Finally, HALion's onboard effects are weak, and the routing of effects is very hard to understand and use.
I've marked down HALion in the ratings because the manufacturer mistakenly claims that HALion is a sampler. When Steinberg finally gets around to addressing these problems I will raise these ratings accordingly.
HALion is in dire need of an update. Image-Line's DirectWave costs 1/4 as much as HALion, and does not have the debilitating limitations. DirectWave is a much better and much more useful sampling tool.
The current HALion 3 release (3.1 final) is stable in every regard; a _huge_ number of bugs has been fixed since the very first build of 3.0. The integration in Cubase SX has always been great and very straight forward. I don't think the user interface is very beautiful, but it does what it should. The interface has been improved quite a lot for those people who create or edit programs. The new effects are really fine.
The filters are much better since version 2.x, and the delivered content is very usable and of high quality. The drums and strings are simply great (the drums already were in 2.x). BUT: The delivered content is preset only; you can't extract the samples or use them to create own patches, though you can edit the programs. So if you are used to archive your songs together with the samples you use, e. g. on DVD-R, you won't be able to, except you burn down the complete content archives of HALion 3 again and again (4 huge files).
With 3.1 (final) a new streaming mode was introduced, that gives a lot better performance than any previous HALion version. Comparisons with Kontakt show that it beats the latest version of the NI sampler, too.
HALion 3.1 finally is a mature product and is recommended to anyone who needs many many voices, excellent disk streaming and a powerful and really complete sampler.
HALion 3 comes together with a front end so it can also be used stand alone. According to the forums, there's some issues left with this and certain audio cards, and preferences are not always remembered correctly, so I recommend to use brainspawn forte or a similar host instead.
There's a quite active support forum at http://forum.cubase.net.