Oh I wouldn't say it's a back step.
The Arch&Design material is as good if not better than the Vray materials. Besides there are also a heap of other shaders available that will give unbelievable control over your renderings. IF thats what you are after.
Sure it would be great to have the proxie objects of Vray but I must say that that is possibly the only feature that I miss. Mray3.5 is a huge improvment over past versions and is very quick.
The Final Gather is very good, so much so that I havnt needed to touch photons since.
The sun and sky system is fantastic. What I also like with the mr Physical Sky shader is that it isn't limited to the environment slot and in itself whilst very simple and straight forward to use it is very powerful.
The Mentalray community has taken a leaf out of Vrays community book and is becoming more and more open, have you taken a look at the mymentalray.com , Masterzaps blog mentalraytips.blogspot.com and not to forget Jeff Pattons blog
http://jeffpatton.cgsociety.org/blog/ a wealth of information
JHV