Personally, I've found most "on screen joysticks" pretty lame, no matter how slickly they're implemented. Its a pretty clear case of taking a solution from a different technology (consoles/arcades) and trying to apply it to a new and rather different technology (multi-touch screens), and resulting in a mess. So, I'd add some more "cons" to your list that the joysticks give no natural feedback (e.g., for resting at neutral, or reaching a limit of the joystick on any axis, or knowing if your thumb is "on" the button or not).
On one of the recent Google Android Developer Hangouts (Mar 30, 2012), the Google folks reviewed 'Overkill' and I remember them commenting on how they liked they way it improved on the virtual "joystick".
'Neil Rajah' is a new (libGDX-based) game with a nice twist on the standard joystick. Its like Canabalt in that your character auto-runs, but left and right thumbs control jumping and attack respectively. I thought it was reasonably well done, and a compromise that worked well enough with the limits of multi-touch. (On second thought, it hardly qualifies as a joystick ... but maybe that's my point.)
I suggest you edit the question to be less libgdx specific and more about generic multi-touch (unless I'm mis-reading your intention). There may be games on other multi-touch platforms that do innovative things with virtual input controllers that would be worth"borrowing".