We played a few games with MI vs. MI at the playtest day on saturday last. It doesn't marry very well with the existing rules - both cases it was Pathfinders vs. CAP troopers and CHAS, and both times the Pathfinders won, though it could easily have gone either way on the dice. Had pathfinders gotten their extra benefits (dodge save, reaver missiles etc.) they would've been far more advantaged. Also, pathfinders had snipers whereas caps did not, so I had the chance to eliminated sergeants pretty freely.
Pathfinders won out basically on use of cover to get their rerolls, and that's all. Also, very lucky shooting - shredders are very nasty weapons.
The MI really aren't built to take damage, but are very good at rolling lots of dice. A cap trooper is easier to shoot than a warrior, and each MI trooper can basically stand a good chance of forcing 2 armour saves on a cap trooper for every 1 it might force on a warrior (4+ to hit vs. 5+).
Fluff wise I think it'd be easy to set up a battle between MI - either it's training, or you can imagine lots of Colonel Kurtz scenarios where some elite pathfinders have gone rogue, and the MI have to hunt them down.