I've been using Inkscape a lot recently, with my 6 year-old driving me to create diagrams / drawings according to his instructions, and it's interesting and very usable.
In the course of my travels I found the Inkscape road map, which makes very interesting reading. Take a look:
The current version supports primitive layering, through the ability to edit inside a group of objects. In some ways I find this _more_ useful than layers, but in a version or two there should also be a full-blown layers dialog to support layering in the way people expect. Arrowheads are supported in the current version.
With full layering, the only things really missing as a diagramming tool are connection points. These are listed in the roadmap for about six milestones out, suggesting that they won't happen for around 9-12 months.
So from what I see now it appears that Inkscape will become a very good tool on a relatively short timescale. In the meantime, when I need things to tie together in that way I use OpenOffice.org Draw, or Dia (depending on whether pre-existing shape libraries will help my task).
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