non "native" iso's

My understanding is that it's best to use my camera's lowest native iso, but what are the downfalls of using the "lo" iso's? I'm well aware that the hi iso's are going to bring more noise.

With low ISO you have to use a wider aperture and/or longer exposure so there is more risk that your photo is unsharp or that the depth of field that is too shallow. There should be no noise.

For landscapes I do the same as on medium-format film - native ISO with small aperture, slow shutter speed and camera on a heavy tripod.

NOTE: I misunderstood the post. I thought he was talking about the native ISO of the sensor. I've never used the "Lo" settings

Less of a dynamic range, but not noticeably so. Lo is very useful in many situations.

Just to compliment what Charles said...the ideal is to use the lowest ISO possible but under "poor" light conditions that will make the exposure time to long which is not practical in most cases, so using a higher ISO along the aperture value will influence the exp. time.
There are no rules per say, the point is to get the correct exp. baring in mind the exp time according to the subject or scene.

So, why the Lo1, Lo 0.7, Lo 0.3, then 200,250, etc... up to 3200, then Hi 0.3, Hi 0.7, Hi 1 rather then calling the hi and low by their actual iso number?

Because Nikon are just different.
It may be they don't map exactly to the ISO numbers ?

I read a blog post by a pro once that said by using the Lo ISO settings, you are going to introduce more noise into the image. The same way that you do by using a high ISO setting. Not sure of the technical reasons why... He went on to say that it would be better to us a neutral density filter to lower your shutter speed than to use the Lo ISO setting. I have never tested it myself so I don't know if this is true or not.

On the newer Canon bodies I really can't see a difference in image quality using ISO 50 or 100 verses ISO 200 or even sometimes 400 (if there is little shadow in the scene).

I don't think there are "downfalls" to using Lo. It's just more tools to offer you more control. If you need longer exposure times or want a shallow DOF in bright light (like a portrait outdoors), then having Lo is extremely handy and preferred over using ND filters IMO.