Dunno, I'm still leaning heavily towards full BM when 2.1 hits man. Its just been murder on the PTR with DPS testing.

I can speak to this: I had been using my pet on Aran with no issues at all up until last week, when he set off a flame wreath. As far as I can tell, the only thing I did differently was resurrect my pet (I don't remember why, just that I resurrected him) and it set off the flame wreath in which I was standing. The typical rule of thumb I use is "No one can enter or leave a flame wreath without setting it off", but since my pet hadn't been detonating the raid I didn't think it was an issue. I doubt I'll be able to test it tonight when we do Aran, but I'll ask the raid if they mind if I test it (or perhaps testing this would be better done on the PTR, I don't know).

So as far as I'm concerned, there are a couple possible issues:
1) resurrecting a pet sets off flame wreath
2) they changed things so pets now detonate flame wreath all the time
3) we all were incredibly lucky and never set off a flame wreath before, and nothing has changed

I would say 1 and 2 are far more likely, but I don't have enough evidence to conclude between those two.

Did some more tests on 2.1 PTR.

Builds used:
MM: http://www.wowhead.com/?talent=VxbZVEoRVzGestch
BM: http://www.wowhead.com/?talent=meb00xgRwuVoVxbRV

Results (SWS 2.1 Beta):
MM High ~ 895 DPS
MM Low ~ 850 DPS
MM Pet ~ 120 DPS

BM High ~ 860 DPS
BM Low ~ 820 DPS
BM Pet ~ 250 DPS

How:
I pulled badlands mob, let pet gain around 10k threat and then in "same" secound: started rotation, marked target and turned on SWS counting. After around 2min (HM end and/or OOM) I turned off SWS. Did 3 tries each build, then removed crit and calculated avarange, then added assumed crit and miss ratios (see notes).

Notes:
- High: arcane9, multi6, steady1
- Low: multi1, steady1
- One special between autos (2 are impossible due to 500ms ping)
- KC not used (I think it is crap + reason above)
- MM 21,5% crit (due to barrage), BM 20% crit, MM pet 5% crit, BM pet 15% crit
- MM/BM hunter 0% miss, MM pet 8.6% miss, BM hunter 4.6% miss
- -5% to pet damage due to 2.1 glancing
- victim was good old badlands mob (but with crit/miss adjusted after)
- DPS lasted ~2min, HM active (0 stacks at start), rapid fire, trinket and BW used once per 2min
- Gear was mix of T5 + phoenix bow (with +12 scope)

Conclusion:
Which is better? Answer is: "Depends on encounter". MM is safer and also uses less mana. On the other side BM can outdps MM while encounter is pet friendy.

Anyway what concerns me is very poor damage/mana with high rank shots used. If you look at results we gain ~10% damage for DOUBLE mana usage. I think something is terribly wrong here...

Sometimes I think Blizzard want us to be that way:
Turn on Viper, put HM on target and spam steady!

EDIT: Forgot 5% dodge for pets. Now I am thinking about real % of pet dps due to pet unfriendly encounters/abilities, positioning (parry) etc. I think 50% would be safe to assume? Also MM hunter probably scale better with raid buffs.

I'm wondering what encounters ARE pet friendly. The main bosses I have seen are
Maulgar- pet not really useful as I'm typically tanking the shaman guy in NR gear, I suppose I can switch the pet to hit the dps target but typically I just try to keep the shaman situated
Gruul- Dies to stone/cave in quite often
Magtheridon- Dies to adds but if you are vigilent it can survive Magtheridon himself provided the blast waves are stopped immediately, and Magtheridon doesn't conflag the pet too much
Hydross- seems to die once he gets the Poison Dot
Tidewalker- Dies to earthquake
Karathress- not too bad, priest boss AOE chews him up a fair amount but this one isn't that bad
Void Reaver- seems to die pretty quickly to melee Pound

I haven't been on the PTR to be honest so I don't know how big of a benefit the new HOT and avoidance are going to be, but it seems that you would almost always have to have that HOT up for it to be able to heal enough to keep the pet alive. I know that right now it is too much of a mana drain to try to Mend pet everytime it gets hit by conflag/earthquake/ground pound.

All in all I am very excited by what I read here and think the community has supported that on pet friendly encounters BM is superior to Marksmanship. However, I'm wondering if there are enough pet friendly encounters to justify this. From what I have seen there is not.

I really can't argue too much with you, since my guild hasn't cleared Magtheridon yet and I have no SSC/TK experience. I can say that many of the fights in which a pet IS usable don't really feel as though they benefit from the extra dps all that much. What I mean by that is that for many fights where I can keep my pet alive, a rogue, fury warrior, or enhancement shaman more than makes up for the damage I gain by being able to stay in melee and keep pounding the boss. I guess this isn't clear, but let me make an analogy:

My Honda Civic goes faster when it gets gas, but a Ferrari would go faster with gas. If you liken the ability of classes to stay in melee on certain fights to gasoline, you quickly see how a Honda Civic (BM) becomes a less desirable option to a Ferrari (heavy melee dps). Perhaps I'm rambling, let me wrap this up. I'm not sure of the percentage of encounters where you can EASILY keep your pet alive (you can keep your pet alive on any encounter by dismissing him, but that's irrelevant). I DO know that BM is more dps than MM with the pet alive. It now becomes a question of economics: Do I take the small gain for the majority of fights or do I take the large gain from BM on the minority of fights where my pet doesn't die quickly?

We had a snake from a snake trap set off flame wreath last week.

I've always acted as if my pet could set off flame wreath - I just hit STAY as soon as I see it casting and turn it back off afterwards. So I can't tell you if you're hitting issue #2 or #3, but I'm pretty sure you're not hitting issue #1.

Aran is in fact almost my ideal "difficult to handle pet but possible" encounter. Everything can be done with stay/follow attack/passive. You can't use him all the time (Flame Wreath unless no melee gets it, arcane explosion, etc), but you can use him a lot of the time. It gives me something difficult but possible to manage. I like Prince for the same reason.

I recently respecced BM with another hunter just to test it out. 2p Riftstalker set bonus helps a lot (http://www.wowhead.com/?spell=37499). 15% proc rate, although I have not seen it crit, but I havent really been watching it either.

And so far we've noticed that:

Maulgar: Yes, dies to Whirlwind if you dont micro-manage your pet.

Gruul: Died a few times to cave-in since pets take full duration Stoned (30s i think)

Magtheridon: Can die, but if done correctly will live most of the fight without having to micro-manage too much.

Hydross: Easy, havent had him die yet. Just need to call back during transitions.

Lurker: I dont even use my pet since I stay on the small platforms the entire time. This fight is terrible for a BM hunter.

Tidewalker: 2p Riftstalker set bonus helps a lot for this. Also pet taking chain heals will live most of the time until I get watery graved and hit my own pet with tomb.

Karathress: Agreed, priest AoE waterbolt pretty much kills my pet every time if meleeing. I usually dont even use my pet for that one add.

Void Reaver: Terrible now with it taking 6-8k Pound damage every 10 seconds or so.

Solarian: Easy if pets receives chain heals.

Alar: Right now, will die most of the time to the flame buffet if it's 4+ ticks.

As for pet mend on PTR (heals for 425/tick, 2800 total if I remember correctly.). It should be fine, but pets will still need heals.

Well, as for FD/drink in flame wreath, as far as I can tell it considers getting up from FD to be someone entering a flamewreath and sets it off. I've seen the same thing with paladins and BoP/DS - when the buff expires, they gain flamewreath and explode. It's kind of funky how it works. My best guess as to the mechanics of this is that it checks to see if someone has gained/lost the buff after the initial cast - so if someone 'exits' the ring (by either walking, DSing, or FDing) they'll lose the buff. If you rez someone into your flame wreath, it appears to consider them as gaining the buff and detonates the ring. Kind of funky, but that makes sense to me.

I don't even bother with my pet on Aran most of the time - Aran always seems to arcane missle my pet and our interrupters always seem to fail to interrupt. Anyway, IF Aran didn't single target cast massive spells on your pet and IF pets didn't set off flame wreath, I would use my pet. This week I'm just going to put him on stay outside the door so I can get the FF buff and leave it at that.

Edit:
Maulgar is funky for pets. We tank Kiggler over by the gate leading to Gruul and then tank Blindeye on the path leading into Maulgar's room - all the way on the other side of the room. My pet usually despawns if I send him to Blindeye, so I either have to put him on Olm or just have him stand next to me and get arcane aoe'd to death by Kiggler. For a fight with as much potental AoE as the Maulgar encounter, though, it's surprisingly easy to keep your pet alive.

Once again, these tests are highly inaccurate due to the level of the mobs. BM obviously depends a lot on the pet, and the low level of these mobs means basically no misses and no glancing blows, which is very much not the case in boss fights. Due to damage multipliers in BM, a BM pet on those mobs will scale exponentially larger in terms of damage due to the mob's low armor.

As for Aran, they fixed him for a couple of weeks so that pets would and immunities would not set off flame wreathe. The same hotfix, they made it so that snakes from snake trap are considered pets (which is why they started showing up in your combat log if you have pet dmg turned on). After a couple of weeks, they had another hotfix and it broke the fight again. They say it's supposed to be fixed in 2.1.

Please read! Miss and glancing blows are included and I did lower DPS of pets. I forgot 5% dodge which I am going to fix now.

As for encounters:
King - send it for priest/warlock while tanking shaman then just send it in for king and call back when WW soon
Gruul - mostly luck based with cave in also huge dps loss due to stoned
Mag - P1 can be bad if people do not know how to interrupt, then it is pet paradise unless very unlucky

Myself I think I will go back to MM, was fun to try BM but it is like pre-TBC: later bosses have more and more anti pet features.

So even with the new pet mend HOT being chain cast it won't be enough to keep the pet out of harms way. I am hoping that avoidance will seriously make a difference otherwise its going to be ugly for BM even in 2.1. I don't think there is anything healers hate more than to heal or buff hunter pets.