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I too had my frame hot-dip galvanized (pics in build thread below). Like yuurei I couldn't see any other way that every little nook and crannie would get taken care of with any other method. Plus I didn't have to do any prep work and the $250 cost was far less than the time/cost I was looking at just to get it cleaned up. I painted afterwards but might have had powder coated had I known it could be done over zinc and had access to a place to do it.
As far as rust creeping under powder coating - I've seen that happen but I've also seen a lot more parts that have been scratched through the coating to bare metal (ATV frames, trailer hitch receivers, quality bumpers, etc) and the rust never migrated past the initial damage. Like all coatings, I'd guess that the quality all has to do with the initial prep work.
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