I agree with most everything mentioned by Victrick. Some comments to add.
1) Memory usage
I do not beileve there is a buffer for each local but there indeed are two buffers associated with the FP object. One that you see, one that the BD uses. I believe Greg has mentioned that controls/indicator terminals are just a little more optimized. An ancillary note is that using a property node to write a value is even slower.
2) Performance
Updating or reading from a FP object is something that should only be done when required. If the VI is not a GUI then use controls to get the data, do all of your work in SR's and wires and only when you are done update indicators. In the case of GUI VI's you will have to interact with the FP objects. In this case locals (and terminals) should be used to update the disaplay whenever the app demands. If the GUI object is large (array, etc) then keep a copy in a SR so that you do not have to read the FP object to get the data. Yes, if the user can manipulate the FP object, you are going to have to find out what they wanted by reading from the FP object, no way around it.
So...
What I am trying to say here is that there is some judgement that has to be applied. In the case of a GUI, us studid humans can only grasp image upadtes at about 30 Hz. So 30ms to do something in a GUI is fast enough. If you are number crunching 30ms is slow!
3) Readability of source code
For GUI's I like to be able to search on a FP object to find its locals and terminal to figure how the code is update the object. This lets me look at other developers code and zero in on what could be causing issue, etc. You could take my above suggestions to far and say, "I will use a minimum # of locals, so I will write new data to a SR in 30 different places and then call a case that updates the control from the contents of the SR." This would be a nightmare to trouble shoot. You would ahv eto serach for every case that updated the SR!
I like the idea that if the data in a FP object is questionable, I want to quickly locate the states where the issues could be.
4) Good programming style
Label your wires going to/from SR's.
Trying to help,
Ben