I have spent years (literally) under military issue ponchos, and can't imagine going anywhere without one. Having grommets in the corners and middle edges is critical in my opinion to make it more versatile as a tarp. If I had an extremely limited amount of space and weight, I would carry the poncho and poncho liner before almost anything else. I have several different civilian types, but none as durable or versatile as the military issue. They are not expensive (expensive being a somewhat relative term) and can be easily replaced.

All that said, what I think would make a better poncho:

Stronger and lighter material

Bright colors

Greater dimensions

I also tend to wear a hat instead of the hood, unless it is raining very heavily. A 360 degree wide brim to keep the rain off of my face and out of my neck.