Well, I got a chance to give the PPS M2 with factory XS F8 sights a go at the range over the weekend.
I only had a chance to put 200 rounds through it. Its my first Walther, and first off, I love it. I am absolutely amazed at this point on how incredibly nice that trigger felt for a tiny subcompact. I've got a Shield, Glock 43, Glock 42, Glock 26. Lots of small subcompacts and I'm just really surprised how that PPS M2 felt for such a small pistol.
With regards to the sights...
I don't have any pics at the moment, but I'm pretty confident at this point that the factory XS F8 sights were a good choice. Both in value and functionality. Based on my own research of the XS F8 sights I was worried they'd be WAY too tall. Suppressor height. Handling the pistol, the sights don't seem *TOO* tall at all. They are bit taller than Trijicon HD's on some of my pistols. They didn't look freakish tall or anything like that. I did make sure all of my holsters for it would handle suppressor height sights though.
The sight picture was VERY nice. If anything, the taller sights really pulled your eye up away from the "clutter" of the top of the slide and kept you more "up" on the target (if that makes sense). The big orange dot on the front worked similar to my Trijicon HD's in that it pulled your eye to it. I tend to prefer the bright yellow dot of the HD's over the orange, but it worked great just the same. The sights were fast, and surprisingly accurate for such a fat front sight post. Once again, similar to my comment on "height", based on my research I thought that the front sight would be unreasonably fat and I was expecting to perhaps NOT like it. I didn't feel too "fat" all. I shot from 3 yards out to 25 yards and even at 25 it was surprisingly accurate. Up closer, 10 yards and 7 yards...the sights were surprisingly easy to "find" when settling after recoil. Follow ups were easier than I expected.
The only thing I am not particularly fond of is the figure 8 vertical alignment of the front sight dot over the rear sight dot compared to the three dot sights I'm used to. I don't use the rear dots on a pistol unless it were dark, which is why I like the fact that the rears on Trijicon HD's do not have white dots, only tritium vials that you don't really notice unless its dark. The XS F8's were the same that way. However, with Trijicon HD's in the dark...I can put the glowing front between the two glowing rears and I know I'm relatively lined up elevation and windage. With the 2-Dot setup of the XS F8, for me at least, its more difficult to get a reliable elevation cue as to whether you are lined up vertically. If you put one dot over the other, they don't sit RIGHT on top of each other or touching...here is space between them when lined up properly. So unless you memorize that amount of space and train setting that up...it would be difficult to find in a hurry. Of course, all of that only applies in the dark. With more training and as I get used to it, I might like that 2-dot setup faster. I'd read advice online and from various trainers that they prefer the 2-dot setup and claim its faster.
The other thing I was concerned about was whether the sights were "sharp". For me, Trijicon HD's are often very sharp on the back of the rear sight (facing the rear of the pistol) and when sitting where I carry (4 to 5 o'clock) I've had them poke shirts, car seats, etc. I worried that with the XS F8 sights being "tall" that this might be worse. So far, they don't seem to sharp at all to me. So far, they seem better than the Trijicon HD's when it comes to poking shirts and seats.
Value-wise.....the extra price I paid for the XS F8 version from Walther was somewhere around $50 more than the standard version. That's less than the price of the sights if I had purchased them outright and I didn't have to install them or get them centered. They were centered and shot well from the factory. To me, that's a pretty good deal. The first thing I always do with a new pistol is replace the sights. I don't like 3-dot white sights because I really need something bright and colored and glowy out front...otherwise I just can't see it well with my poor eyes. So these sights saved me a lot of trouble.
I did notice that the top of the rear sight has two tiny holes that I could only guess were set screws. There was no documentation from Walther included in the box with the pistol on the aftermarket sights so there was no included information on whether those screws were fixed with Loctite or whether those were in fact set screws. I sent an e-mail to Walther and they responded quickly. They told me that the pistol should have come with a small ziplock bag with a business card/contact info for XS sights and a small allen wrench for the rear sight screws. My pistol didn't come with any of that. So I contacted XS Sights and they were awesome. They responded right away, they told me that they provide that stuff to Walther to include with the pistols, and they mailed me out an allen wrench for the rear sight right away. I didn't need to move the rear sight anyway, but now at least I have it.
Please bear in mind, the above is only an initial opinion. I only have a couple hundred rounds through the gun and have only just introduced it into my carry routine. So my opinion may change as I shoot those XS F8 sights more often. But so far, so good. I figured I'd include the information here as other folks seemed curious as well.