I use several of the teamstudio tools with 8.5.1 right now. They all seem to work relatively fine. I use CIAO the heaviest and really have no problems with my normal day to day stuff.
CIAO is "unaware" of XPages and sees all XPages as file resources. I believe I can check them out and in but haven't really tried.
Overall it does work pretty well, but I'm hoping the next version is going to really kick butt!