I'm very curious about this as well, since it sounds like a SV fund simply wouldn't add up -- it's based on bonds, but you are also buying an insurance wrap. Unless the insurance is seriously mispriced, the expected returns have to be lower than a bond fund (because of the insurance drag). I admit that I don't know very much about this product and would be very happy if someone could explain the pros/cons in more detail.
This link from vanguard provides some more information:
https://pressroom.vanguard.com/nonindexed/7.23.2012_Stable_Value_Funds.pdf
It seems like the key factors to consider are the extra expense ratio for the insurance, viability of the insurer, and the liquidity restrictions.