DTP frames are not supported in XL switches. The CatOS switches send DTP frames over the trunk link, but the XL switches do not support DTP frames. DTP is not supported in XL switches. In order to avoid this problem, set the CatOS switch port status to no negotiate. Issue the set trunk mod/port nonegotiate dot1q command in order to set the trunk mode to nonegotiate for the dot1q trunking mode.

3500 vs 2900 would depend on where your network is headed. if you have multiple servers and mass traffic with large files I would probably go with a 3500 for the sole purpose of using gigabit for the links to the servers and backbone. Other than that I would go with a 2900 as my leaf switches with a 3500 at the top in a star configuration with my servers and other switches hanging off the 3500.