We turned on largefiles extension almost a year ago and have come to regret that decision. The major pain point is with integrations, from Eclipse plugin to most any repository management/hosting solution tend to either have bugs or full-on don't support those repos. With plain mercurial workflow it works in most situations, but still rears its ugly head. The maintainers of mercurial classify it as a "feature of last resort" (Read
http://mercurial.selenic.com/wiki/FeaturesOfLastResort).
Switching off largefiles requires rebuilding the repository which rebuilds the entire repository. Orchestrating the migration to a new repository for engineering department is also painful which is why we're stuck for the near future (for example ongoing support for a version that's built from largefiles repo with ongoing feature work in non-largefiles repo).
The tooling for mercurial tends to lack behind git's, likely due to git's enormous popularity - so I personally would recommend avoiding largefiles extension.