I just replaced the original wheel bearings on my XL7 at 242,000km after I got them full of water last summer. I'm having some issues with my aftermarket 17x8 wheels hitting my aftermarket A-arms when at full lock, and I can't find any 17x7 wheels that will remedy my problem, so I'm thinking of just putting some 1" spacers on. Does anyone have long-term experience running spacers? How much are they going to affect my wheel bearings' life expectancy? Any other issues like lug nuts coming loose over time, etc?

There probably isn’t going to be much difference between wheel spacers and crazy offset wheels.  They both change the way the weight is distributed to the bearing.  If spacers are easier to get than offset wheels then run it.

I went with 1" wheel spacers because the price was much better ($100 for 4 vs over $100 each for rims that may or may not work), and I figured with a 1" spacer I may be able to run a more generic 15" steel rock crawler wheel if I decide to go that route in the future. Tires are alot cheaper for smaller rims and they tend to ride better off road since there is more sidewall to flex and there seem to be more load range C tires in that category for some reason.