Hugi 240

I've known riders who were super smooth use that hub in the back of the Demo 8s when they were udergoing the redesign (saw it in 06)- IIRC it was Brandon from SBC.
The answer all depends on you as a rider, not the hub IMO. If you are a wrecker, you will bust whatever you get. If you are smooth and within yourself then the hub should be fine.
If you are the kind of guy who needs EX729s beause you are blowing up rims all the time, then this hub is not probably for you.

Smaller flanges = longer spokes = more flex in the wheel.

I wouldn't particularly advise it, I've had issues with older Hugi hubs breaking flanges and axles (amongst other things) under DH use. I'm of the opinion the material is on the brittle side, and being re-laced doesn't help their case either.

If you're lacing it yourself, not buying spokes, and don't mind wasting a little time then feel free to give it a go to save some money. But if your time is precious and/or you will be spending money on the build, then I'd advise getting a hub worth keeping.

I'd suggest a Hope Pro II if you can afford it; they are light, strong, reasonably cheap and don't make you pick two. They also come in a bolt-up 135x10 setup that will help stiffen QR rearends, almost a must for a DH bike I reckon.

Hope that helps.