I have not played that much of Xenoblade, and while it can be challenging sometimes opposed to FFXII I'd say it is not as frustrating. Sure you when you die you restart at the biginning of the area but at least you keep your items and XP so you're encouraged to try and beat better monster as opposed to XII where when you're overcome you'd better run.
This thread made me want to go back to Xenoblade before finishing Meruru or starting Graces or Last Story, I'm just really unsure about which to tackle first.