If i've understood it right x-factor activation works as a reversal but can only be used from the ground, it then resets and locks damage scaling for it's duration so that everything does full damage.
I heard that when someone does a l m h heavy chain you are supposed to be able to activate x-factor inbetween the medium and the heavy attack and turn shit right around.. I don't know, it may be op, but i do think that is what they where aiming for.
yes, XF can only be activated while on the ground. you can use it to cancel out blockstun. say if someone is rushing you down, instead of advance guard (pushblock) you can XF the blockstun and reversal with a command grab (
) or anything with invincible frames. you could also use it to negate chip, such as during hailstorm, and continue blocking afterwards. remember that it powers up your whole team as well. i think people are looking at the possibilities as too offensively oriented with it's damage scaling buffs. i mean you could even use it for whiff cancelling into command grab/grab supers. i feel like it'll be an interesting mechanic and that people should give it a shot before thinking "ZOMG! BIG DAMAGE!"
plus you have to decide when and where to use it. should i use it early game to kill a point character? should i use it for life regain/chip negation? should i use it for an OCV comeback? keep in mind that unlike sf4 ultras, you have access to it the entire match and it changes levels according to how many characters you have left, which makes its implementation that much more thoughtful mid-game.
just look at this shit man ) ... look at it!
http://www.gamercafe.cl/2011/02/13/marvel-vs-capcom-3-wat-waaaaaaaaaaaat/#comments
yeah i've seen it. it's lvl3 x-factor and dark phoenix. i don't know why people are surprised. it's like you haven't seen lvl3 x-factor thor.
honestly, the overall damage output of the game may limit a lot of high level competition potential, but that remains to be seen. give the game some time. it only came out today.