Jerky Throttle?
 

Right off idle in first and second gear the bike feels like it's surging slightly or almost running out of fuel unless I am super smooth with the throttle. Every other throttle position is fine. It's a bit annoying when creeping along high in 1st gear or low in second (the gearing jump between 1-2 is huge!). It's mostly when lane splitting around 15-20mph.

I love the bike, there are just a few things that need sorting. Aside from this, the bike seems to go through oil... Enough where you would think it would be smoke screening people but I only get a little puff here and there. It's possible it's still overfilled when I measure correctly and the normal oil level is just low?

http://img19.imageshack.us/img19/6674/laoy.jpg

Carburetor
 

Hey there

I'd say your carburetor needs a clean. Most probably the idle jet is blocked or one of the bypass bores in the carb is dirty. Get it cleaned thoroughly, maybe even ultrasound the carb. Check all jets for dirt a and all rubbers and if the membran has no cut. Also all the breather pipes need to be open.
Adjust the carb to the standard setting and then go from there.

Concerning the oil, I know that the XT like to throw the oil back into the airfilter box. So make sure that check the oil when the engine is hot. Let it run for a while, then switch the engine off and wait a few seconds before checking the level.

Greets

Claudio

Clean the carb, adjust the CO/gas-screw and/or replace the idlejet with a size bigger.

As for the oil, you need to get the oiltemp up before you check, which can be very hard here in the cold seasons.