I have an '01 125SX and I'm extremely impressed with the build quality of the bike. Very reliable to say the least. I've had too many bikes to count and I'd have to say this is the tops as far as I'm concerned. I ride GNCCs and Harescrambles which means I'm on it for 2-3 hours at a time. I'm also an intermediate so I ride it pretty hard. Everything has held up really well. I'm even running the stock clutch after 10 months! The only problems I had with the bike were a drain bolt that came out during a race. I tore the bike down and there was some damage to a shift fork and possibly some bearings but that was all. (I replaced the tranny bearings as a precaution since I was in there.) The clutch was still in great shape. I have a freind that rides with me who has a YZ 125 and he goes through cylinders as fast as I go through pistons!:D The only downside seams to be turning. I hear that the asian bikes will turn better. The motor and suspension should be good and even if it isn't....that's easy enough to fix. Handling is another story.
I started off with a 98 125sx and it was fast. I had a hard time getting the suspension dialed in but it was stock & I'm light at 148lbs. The only problem I ever had besides clutch plates was I had a shifting fork bushing break. I figure after all the hell that bike went through, that was more than acceptable.
My 01 125 sx is a different story. I bought it with the suspension already revalved and sprung for my weight. It handles very nice and I found it quite suprising to be so much faster than my 98. The power hit is broader and smoother than my old one so untill I got it on the track I didn't realize has much faster it is.
My overall impression of the KTM 125's are that are ready to ride out of the box but I found the suspension work does help. The parts are more expensive but the long term cost is less, they hold up.