Martin Simpson is fastidious about the way his guitars sound and he uses undersaddle pickups - Highlander in fact, but probably with an internal condenser with offboard blending/mixing.

I use an LR Baggs Element undersaddle and depending on the quality of the amp/speakers and the EQ I can still hear that fizz associated with piezos, but on the whole I'm reasonably satisfied. The guys that built my guitar (Nick Benjamin) and bouzouki (Richard Osborne) have both suggested that I fit an LR Baggs i-Beam and blend it with the Elements, but I rather fancy using an internal condenser and blending with the Elements - I don't play at high volumes.

As for sound degradation - I can't say, they were fitted when the instruments were made, but I suspect not or not significantly.