It's reassuring to see that many out there are similarly confused.
As far as I can tell there are no disadvantages other than not being able to transfer money in one fell swoop; the advantage, I suppose, is that if you wanted to invest, say, $10,000 but not all in the same place, you could make the full $10,000 transfer and then dole it out among your Vanguard investment vehicles from the MM/Sweep account.
Hmm. I still don't get why they are making people transition and having it as the default signup option..