Listed below is a compilation of all responses concerning my question about the advantages and disadvantages in using the Marc holdings format for serials holdings vs. using the textual field in III.  Thanks to everyone who responded.  It seems as if there is a fairly steep learning curve for serials staff, but many benefits in having a standardized format.
*       We are transitioning also to MARC holdings and have not decided what level of enumeration that we want to use with our dead titles.  For current journals, we are listing the bound holdings with one level and the current receipts with two.  It is taking staff a while to learn to interpret the difference from the old way.  We are also a III library.
*       We are using the MARC holdings format on Sirsi.  We originally thought that we could stop creating an 866 field for new titles and that the collapsed MARC holdings 863s could replace that.  We're finding that because there is a byte limit to the amount of data that can be stored in the MARC holdings record on Sirsi, we are going to have to either remove or archive the earlier 863s.  This will leave our collapsed holdings statement incomplete.  We're facing the possibility of having to add 866 fields for new serial titles added to our collection since 1999.  The collapsed holdings statement is also labeled "Recently Received", which has become something of a misnomer since it shows everything we've received since 1999.  The original idea was that the 863s would be removed as issues were bound, but that step never materialized. A complicating issue here is that because the 863s are very formatted, that data has been identified as having potential use for linking to tables of contents if we were to digitize those.  So, from our experience, I guess some issues to consider include: How will they display? Do you want to retain and will your system allow you to retain all of the 863s forever?  Do you want or need to maintain both an 866 holdings statement and the MFHD?  How will binding impact your decisions?
*       I'm not sure if this is helpful or not, but we have just implemented online check-in on Voyager.  It lists each issue on our current shelves under recent issues in OPAC.  Then when an issue is bound, we use the "collapse" function.  It combines all of the issues into one and puts two lines in the holdings record.  The first line indicates the values.  The second line is for the volume and this is now listed in OPAC under older issues.  This summer we inventoried all of our bound volumes and we are now adding lines to the holding record for each volume to which we currently subscribe, using the same format as the line that Voyager is putting there.
*       At first I was resistant to doing this.  However, it clearly shows patrons gaps in our holdings and provides a better permanent record of what we own.  I'm not sure if we will do this for items that we are not currently receiving.  It is a lot of work and I haven't found an easy way to do it, except by copying the lines and then changing years and volume numbers.  I'd be interested in other responses that you get to this question.
*       We are just beginning to work on this in our library.  We presently show our local holdings in a 590 note in the bib record.  By going to the MFHD in III, our holdings will appear at the top of the record in the OPAC and patrons will know right away what they can find in our library.
*       We asked OCLC to update our LDR's last June and we had to submit a list of record numbers and our holdings.  Since the list had to include the 590s, it was a bit unwieldy.  This was going to be a summer project for our staff, but OCLC won't get to our library until late fall.  It might have been a smoother process had our holdings been in an 866 or 853/863 MARC format.
*       I've talked to a couple of other librarians about this whole thing and they indicated that when holdings are in MARC format with updated LDRs, interlibrary loan requests seemed to increase for titles they held.
*       We had III change the default for 866 to LIB HAS ("h").  Since we installed release 2002 phase 3 update, I have been having difficulty modifying checkin records, often getting the message "Verifier error..field group contains non-MARC field" and am unable to save or close the record.  III is working on this problem (I had a WebEx session with them this morning) but we couldn't make the error appear today.  We think it has something to do with using the ENTER key on the keyboard rather than clicking on the SUBMIT button when modifying or updating a note.
*       We are also an Innovative library and have begun moving to MFHD from non-marc has fields.  It seems to me that among the advantages are ease in the sharing of holdings information (OCLC likes the current standards) and ease in moving to a new ILS in the future (I would hope that any system we would move to would be able to work with MFHD).
*       There are some on our staff who feel MFHD are too complex and time consuming (in comparison to our lib has information) and others have issues with the way III supports MFHD.