I with my girl rode Georgia and Armenia in 2010 and it was a fantastic trip!
Traffic is nothing to be scared of, sceneries on the Caucasus are majestic, and the monasteries in Armenia are really amazing.
As for the road conditions, there's quite a few potholes on the road but if I did it on my previous bike (a heavy Harley Electra Glide Ultra), any bike can make it.
Don't absolutely miss the Georgian Military Highway up to Kazbegi, it was the highlight of our trip, entirely paved except for 24 km. which anyway will give you no problems at all (I repeat, I rode that dirt road stretch on a Harley with pillion and full luggage with no problems).
Nick and his 2010 Yamaha XT1200Z Super Ténéré