Jerry's swamped, and asked me to cover this.
Horses nowadays have less excuses for x'ing. Change of surface (dirt/turf, as well as off tracks), change of distance, in general, going off a pattern, may produce an X that's excusable for one race (although, even in these cases, the change represents a trainer with fingers crossed hoping an ouchy horse will take to the change.) The short answer is that true x's (more than 3 or 4 points) make the horse very suspect. I would want that "somewhere on the sheet" to be as far back as possible from today's race.
Dead rails represent a non-effort, an x with a legitimate excuse. Since a horse's last race is generally the main factor in determining its odds next out, horse x'ing on dead rails are good betting opportunities, all else being equal.



TGnick