Just my take on a random selection of comments and questions raised in this thread:
"Do people use Emacs for serious coding?"
Yes. I myself use Emacs for writing and compiling La/Con/TeX(t) documents, performing statistical analysis in R, and messing around with E/Lisp (ok, so the last one isn't all that serious... yet).
"There is no advantage to running Emacs in X."
Falsch. Image-dired and docview mode depend on X, and twittering-mode and EMMS (Emacs Multimedia System) certainly use X display capabilities to good effect.
"Emacs is subject to feauturism/bloat."
I can see why people might see it that way, but for me, the extensibility of Emacs is one of its most attractive aspects. Getting to grips with Emacs is, as other posters have rightly pointed out, at the very least a rather involved process. But so too is getting to grips with Vi(m). The difference with Emacs is that if you learn the shortcuts, commands, and typical behaviors of Emacs in general, then you can -- by extending Emacs -- use that knowledge when performing tasks like reading and writing emails, listening to music, programming, posting on Twitter, browsing the web, etc. etc. Having a consistent interface for a wide variety of tasks is very economical.
But, you could argue, that it's not at all economical to have one application that tries to do everything -- surely, there are going to be some things that it just isn't suited for. I totally agree with this principle, and it's one of the reasons I think that projects like Google Chrome OS (or whatever it's called) are so misguided. Projects like that attempt to use, for example, web languages and technologies to do things -- e.g. word-processing -- that there far more mature, stable, and efficient apps do far, far better.
The thing is, people who write new modes or "apps" for Emacs typically recognize this. If we take EMMS as an example, we can see how it leverages Emacs for things that it's good at (text editing/display, command/shortcut interface, etc.), and outside applications for what they're good at. EMMS doesn't use Emacs to attempt to "play" your music, or even read song/artist/album info from file metadata; it leaves that up to mplayer (as one option) and mp3/ogginfo respectively. It can even use MPD as a backend to speed up performance when it comes to, for example, retrieving track information.
Most extensions to Emacs adhere to the above approach, although there are some like the aforementioned docview -- although even that does use an external application, namely Imagemagick, to handle the stuff that Emacs isn't good at... it's just that converting from PDF/PS to .png is far from being an optimal solution.
"Emacs is complicated/difficult to learn."
As I already conceded, this is quite true. It's probably the biggest reason that Emacs isn't more widely used than it is. The learning curve is not insurmountable, though, and one thing that Emacs has in common with FreeBSD is magnificent documentation. Now I'll be honest, I came to Emacs from Vim and the first thing I did (other than playing Tetris

) was enable "vimpulse" -- a mode which modifies Emacs to behave in a more Vim-like way. As a result, I did very little RTFM-ing for many of the months that I have spent with Emacs. It was only after I gradually weaned myself on to doing things the Emacs way that I began to consult the online documentation. Once I did that, however, I was surprised by how quickly I learnt the basics required for cursor movement, editing, and buffer/window management.
The tutorial (accessed with C-h t or Ctrl+h ~ t) was immensely helpful, as was the Emacs Manual (C-h r or Ctrl+h ~ r), as were various blogs like "Mastering Emacs", "Emacs-fu", and Sacha Chua's "Living an Awesome Life" blog. Also worth mentioning are the "Hack Emacs" series of tutorials on Youtube by rpdillon, and the "Programothesis" channel by emailatask. Of course, learning all this stuff is pointless unless you retain it, and the best way to do that is to make a commitment to sticking with Emacs for a decent chunk of time, and using it for stuff that is actually of importance to you: whether that be keeping up with your emails, planning and managing projects of one sort or another, or what-have-you. You gotta get some long-term synaptic potentiation going on, and the only way to do that is through practice and repetition.