Are there reasons not to use JSONP for AJA~X requests?

Downside? It's fairly limited - you trigger a "GET" request and get back some script that's executed. You don't get error handling if your server throws an error, so you need to wrap all errors in JSON as well. You can't really cancel or retry the request. You're at the mercy of the various browser author opinions of "correct" behavior for dynamically-generated <script> tags. Debugging is somewhat more difficult.

That said, i've used it on occasion, and haven't suffered. YMMV.

Retrieving errors when a jsonp call fails is possible.

http://code.google.com/p/jquery-jsonp/

Hope it helps.

I would say the biggest limitation might be the extra overhead for have the browser render a script tag to call the server. Plus is JSONP really considered AJAX since it doesn't actually use the XMLHttpRequest object?