I recently went to Vegas for my brother's bachelor party. He stayed at the Luxor. I stayed at the Palms. I maintain that this decision proves that I am the "smart one."
I guess the Luxor holds some nostalgia for him and his buddies who went there years ago when it was the new standard in Vegas luxury. Now it just seems dated. The main floor is crowded and confusing. The architecture just seems random. His room was larger than mine at the Palms, but I wasn't impressed with his room at all.
One of the downstairs bars was nicely done, but no one seemed to be interested in it during my visit. They all seemed to be overwhelmed by the size of the place or searching in vain for their friends or family.
Unless you were getting a really low rate and then spending all of your time at Mandalay Bay next door, there's no reason to go here.