So many people now are converting to Vst orientated set ups. I know a lot of people who have some decent hardware that is just sitting there gathering dust now. A lot of the stuff now with Vst sounds really good, and because of its wide use, its character is getting played with. I remember when the warm analouge sound was the only thing you aimed for, now it seams its a play off between analouge kicks and bottome end fused with very digital sounding synth lines and crunchy top end. I would deffinately save your money and go down the vst route. At least then you wont feel guilty if a plugin ends up not getting used.

The main problem with Vst is how much choice is out there. When you buy a piece of hardware, you tend to learn the thing inside out and really get it to do things it wasnt designed to do, (see squarepusher for best example of this). But with vst, most people have thier plugin folder full of hundreds off different things and try to use them all instead of learning a couple extensively.

That being said, you only have to look at reactor to see the huge benefits from Vst.