We've got both a Xant Est and a Picasso. Both have plus points. The ride and boot size win out in the Xantia, but the high seats in the Xsara win hands down for practicallity with small kids. What to look out for in a Xsara Pic? Well, there are billions of them about, so don't buy anything that is ropey. The ride and handling is OK - if you like roly poly! It will hang on though if pushed. The interiors are a bit flimsy for their intended purpose (ie kids!) so expect a few bits to be awry! The HDi 90 is adequate in the performance stakes - avoid the 1.6i, it would struggle to pull the skin off a rice pudding when loaded

Ours does about 45mpg, which is not bad for a brick on stilts! LX does not have A/C but this is a must with all the glass, so go SX or above - but make sure it works! The HDi in tank lift pump is a tank out (read expensive) job when it goes. Ours is looking like needing a new CV joint at 60k miles - it has a history of MOT failures on the boots being loose, so check any you are looking at for this. The dash reflection in the windscreen is awful - especially if it's got a light coloured dash. If it's not been valeted tell the garage NOT to polish the dash with cockpit shine! We've got black felt stuck on ours now to make it bearable - not pretty, but it's better than crashing it - the reflection can be that bad. The A pillars are a bit intrusive but you get used to looking around them. Front door locks fail regularly - I've got one to fit somewhere! Cambelt is due at 100k on the HDi, so if you are looking at a 90k one - get it done in the price. Light bulbs fail in the display, but these are pretty easy to replace. Front window winders go ga ga same as Xantia ones,so factor that in if they're noisy or rough. The windscreen is prone to getting scratched by the (very long!) wipers, esp on the passenger side. Ours got a stone chip in it, so we got it replaced, and it is much better.
Having said all that, we have grown to like ours. It's not pretty, but it does exactly what it says on the tin, at a reasonable price - we'll probably 'upgrade' ours to a 110 HDI in a couple of years.