'Are you just referring to Android 2.2's "Move to SD card"...?'
Yes. And you are right, mounting the SD Card via USB makes it unavailable to the phone, with all the consequences. However, you can avoid the need to mount it by using the Android Debug Bridge (adb) command line tool from the computer to push and pull files, etc. A small price to pay for a taste of the latest Android flavour, what? :)
Regarding the battery consumption, I have to say that I didn't scientifically benchmark the difference. I did tend to use the phone much more after flashing the new ROM so that itself was a contributing factor. My bias was completed by reports of others experiencing a quicker drain, but again, I have to say it has never been a deal breaking drain that ever made me consider reverting to the original firmware.