Hey Thomas

How can I ingest my XDCAM files using the log and transfer?

If you're working with the XDCAM EX variant of XDCAM HD then you use FCP's built-in Log and Transfer to do it, but you need Sony's FCP Log and Transfer plugin for the format (PDZK-LT) which you can get here; http://www.sony.ca/xdcamex/software.htm

The reason for wanting to use the log and transfer is I have been told I can use that method to transcode to ProRes on ingest. Is that correct?

Nope that's not correct .. just like the XDCAM Transfer app, you can only can only rewrap the XDCAM codec essence (the actual video/audio data) as Quicktime movies. If you want to work in ProRes then you need to transcode the native ingest after the fact, or capture direct using Log and Capture (baseband capture via suitable I/O hardware eg SDI and your Kona card)

And, that brings up the BIG question. Will my editing day go smoother if I edit in ProRes LT as compared to staying native XDCAM HD?

The majority of folks who work directly with native XDCAM HD have no issues whatsoever, its a natively supported codec in FCP, it looks gorgeous and has a low data rate .. but nonetheless its a Long GOP (MPEG2) based format and that makes it a computationally intensive format for your system to handle. Would working in ProRes be 'smoother' .. yes, I think it would.
Best
Andy