Integration of the alien alloy into the basic S.H.I.V. design results in a weapons platform that is both lighter and stronger than the original. The reinforced chassis allows for this S.H.I.V. to be used as a mobile cover position in the field.
The inverse maneuver of positioning the S.H.I.V. in front of a stationary trooper does not provide the cover bonus. (Corrected in XCOM: Enemy Within.)
It is not advisable to use an Alloy S.H.I.V. as cover from an enemy equipped with a grenade, as the blast radius will impact any soldiers taking cover behind the S.H.I.V. as well. It's also not recommended to do this when faced against a Sectopod due to the splash damage of Cannon Fire.
As the Sectopod's Chest Cannon doesn't cause splash damage in XCOM: Enemy Within, this tactic is viable to try and bait the Sectopod into setting up a Cluster Bomb attack.
Alloy S.H.I.V.s are great at taking out Sectoid Commanders. The Alloy S.H.I.V.'s immunity to Mindfray and Mind Control, plus its high health make it difficult for Sectoid Commanders to bring one down with only their Plasma Pistols, and their Alien Grenade can only be used once.
The wreck of a destroyed Alloy S.H.I.V. still provides partial cover, though it's obviously no longer mobile. This is possibly a bug, as if the S.H.I.V. is destroyed while moving by an overwatch reaction shot, the shell is not a valid cover object, and when reloading a save, it may also disappear.
Revealing an enemy pod with the Alloy S.H.I.V. in close proximity may bait them into using the S.H.I.V. as cover. Afterwards, the S.H.I.V. can simply be moved away, leaving the enemy exposed.