My son can't seem to decide what character he wants to play, he has a new idea every month! He likes to use NPCs in the party when he DMs because it gives him a variety of characters to play. He usually finds a reason after a few gaminig sessions for the character to depart the party so there is no long term commitment to the party. When we start an evening we never know which NPC might tag along with the party. (We also never know if the NPC is on our side or against us!) He sometimes longs to play that uber character that outshines the rest but usually the NPC he creates is so specialized that he could never be able to consistently over-shadow the party even if his conscience would allow him to do so. So, you have at least 1 DM that uses NPCs as a party member.
As for your question regarding XP, the NPC should not recieve as much XP as the rest of the party. There is the great amount player knowledge that over-shadows the game in this situation and it would be impossible to make every player believe that the DM could perfectly seperate player knowledge from character knowledge. So, it would be socially polite for the DM to restrict the XP if only for this reason.