What alternatives exist for VSTO?
What does managedxll do that VSTO does not - When would you use one vs the other
Google does not bring much up on this subject
This is more of an interview question - What are the pros and cons and both is the crux of the question here
Apples and Oranges....managedxll is for help building automation add-ins and is limited. It only targets office 2003 (AFAIK).
VSTO gives the developer the ability to write C# code directly against the interops of Excel, create smart documents, forms ribbons and add-ins in separate .net assemblies of the .net language of one's choice.
Plus no runtime license is required for use of VSTO.
HTH
VSTO presumes you are using Visual Studio as your development platform, thus mainly targeting professional and corporate developers. 'Power users' who create macros and add-ins with VBA seem not to be the the target audience for VSTO.
If you are interested in add-ins for Excel, the native .xll add-ins have some specific advantages over VSTO, in particular they support creating high-performance user-defined functions. Libraries like ExcelDna (and ManagedXll which you mention) make it easy to create .xll add-ins for Excel using managed code. Contrary to what OmegaMan says, these .xll-based add-ins do not work through the Automation Add-in interfaces, support Excel versions from '97 to Excel 2010 and allow advanced features that VSTO does not support, like registration-free Ribbon and RTD support.
For creating add-ins for various other office applications, in particular for Outlook, you could also look at Add-In Express.