Two thumbs up on the Gatewood Cape. It will provide much better weather protection as a shelter and works fine as rain gear.
Pros and cons on poncho-style rain gear:
*covers to knees or lower
*protects pack too
*can be used for primary or emergency shelter
*flaps in wind
*catches on brush
*exposes lower arms
Take a look at the photo of Ryan Jordan wearing a BMW poncho tarp. He is wearing gaiters to protect his lower legs and what appears to be some sort of wind shirt to cover his arms.
In this case he is wearing a hat, but with most poncho-style arrangements, you can use the hood as a "gasket" around your neck and wear a brimmed hat (my preference), or wear the hood, or wear a baseball-style cap under the hood. This last arrangement has cured a lot of poor hood designs!
Note that he has a cord tied around the waist to keep the sides under control. This is simple, cheap, and very light weight. It can help with wind and brush both.
To cover the lower arms a water repellent wind shirt works well. If you are carrying a pack and walking at a fair pace, you are good to near freezing with a wind shirt and some sort of base layer under. Gloves will be needed as the temperature drops with any rain system and poles. If you aren't using poles, you can keep your arms well covered under a poncho. Some poncho systems have thump loops to help keep things under control. I was walking in cold rain and sleet (~40F) with a SMD Gatewood cape with a Montane Lite-Speed wind shirt, a polyester long sleeve base layer, and water resistant gloves. The cape left my lower arms exposed from a couple inches below the elbow and the DWR qualities of the wind shirt kept my arms dry. I tend to perspire heavily and rain jackets rarely ventilate enough to keep me dry inside. I had no problem with the windshirt/cape combination. My lower legs got a little damp and the rain ran off my arms.
Keep in mind that UL hiking works best when you have a coordinated system. Most of the gear lists you will find here use some sort of light wind protection with variable layers under. One thing that I had to grasp was that with internal frame or frameless packs, you have one side of your core very well insulated-- sometimes too well! I'm saying that you have a pack up against your back, keeping cold wind off and heat in. Keep in mind too, that a poncho style system does cover you to the knees and does add another layer of wind and convective heat loss protection. At any rate, you need insulation more when you stop for break or to camp than you do when you are moving-- particularly above freezing.
Getting back to coverage with the poncho-- the lower legs may need some coverage. In light rain, it is easiest to let your synthetic hiking pants do their DWR thing. Gaiters can cover up to the knees and may already be part of your system. Chaps are another option. I elected to use light rain pants (Marmot Precip) and make them part of my overall system, using them as more heat retention or teaming them with a pair of long polyester underwear if I'm just wearing shorts and need more wind and temp protection or my regular hiking pants are too wet, etc. Rain pants will allow you to sit on a wet surface in camp or rest stops too.
Brush and wind:
These are weak points for poncho style systems. Any loose fabric is a pain with brush and the brush will get you as wet (or wetter) than rainfall can. If I were doing coastal hiking, I would rather have a rain jacket and pants. I don't do a lot of bushwhacking and it would be a summertime side trip if I was, but it is just common sense that a poncho isn't as handy in heavy brush. That doesn't mean that you can't handle occasional trail brush-- you could catch any gear on brush if you aren't paying attention. I worry more about piercing or ripping my pack.
In high winds I don't think ponchos are as effective and this is a compromise point. A cord around the middle will help a lot. In moderate cold wind, I think they are better as they have more coverage. If you have ever worn a trench coat, you know how warm they are as your upper legs are covered and there is a lot of body mass and blood flow there. The poncho gains there, but loses when the wind really picks up and starts flapping. If I were traveling in areas consistently windy and rainy (like the Olympic beaches), I would want better shelter as well as rain protection, so my system would take a shift--- and the weight would go up a couple pounds!
Ponchos as shelters:
In general, I don't like flat ponchos as shelters. None are really large enough to afford much protection and require using a bivy sack of some sort for heavier weather and convective heat loss from the added exposure to your sleeping bag. IMHO, tarp systems work best when they are fairly large-- like twice or more what a poncho tarp covers. I think needing a bivy sack is one step forward and one back-- more weight, cost, and complexity in the system.
Which is why I went with the SMD Gatewood cape. I got good rain protection, 360-degree coverage when sheltered and 11oz for my rain and shelter systems. I was able to drop a 12oz rain jacket and 4oz off a shaped tarp shelter, and the pack cover I was using was 6oz, for a total of 22oz saved. I could pay a lot of money and put up with other hardships to knock 22oz off my system in other areas! The cape uses one pole (or stick), six stakes, and has one guy line. I could drop another 8oz for summer use if I want to go without rain pants.
One other item about poncho-style shelters: you need to remove your rain gear to put up your shelter. I've come up with several options:
*Get wet. With my system, this would just be my top and it would probably need to come off in camp anyway as it would be wet with perspiration. It only takes a few minutes to pitch my shelter, so its not like I'm going to be exposed for a long time.
*Rely on the DWR properties of your wind shirt. Again, this is part of my personal system and will work for light rain just fine.
*Use a temporary backup. I carry a couple low-density polyethylene 45 gallon garbage bags (1.4 oz each). They are great for wet/dirty clothes and large enough to go past my waist for an emergency bivy. A couple minutes with a knife can turn one of those garbage bags into a nice rain jacket-- a slit in the top seam of my head and on each side seam for my arms. This is quick and easy, and I can knot off the cut section of the bag for other uses after. Cut completely open, they are large enough for a ground sheet.
Finally, poncho-style systems are great for day hiking. You can throw in it in your pack with a space blanket (or bag) and get yourself out of a real tight spot of you find yourself hurt or lost or the weather turns on you. It might not be the best night of your life, but you will be back to tell about it.