Yeah the 'Go' version is a lot less flexible e.g. you are not able to use the multi-domain feature of Magento with 'Go'. This is one of the main reasons we started using Magento i.e. we have a lot of different brands/domains running off the same installation and using the same inventory. We receive orders from all our sites into the one magento admin. It's really neat and a real time saver. We would never have been able to maintain this many separate sites at all.
I do believe there are also restrictions on payment methods and you wouldn't be able to tweak your code. Not sure about installation of 3rd party extensions either, which you would always want.
The 'Go' solution has a live chat on the site so you can ask specific questions of their sales team there
Magento Go is much limited that then community edition. You do not have access to the core files in Magento Go and hence most of the things are limited. since you do not have access to the core files, you cannot modify things around and create you store, add features like you want.
Also, not much support for the 3rd party extension.