I'm currently setting up my first "project studio" and I've run into a bit of a dilemma. I'm quite aware of the various methods of adding effects/dynamics processing via external units, sound cards with DSPs, and software plug-ins. I'm just not sure which is the best way to go, both in general, and for my specific needs. I've just gotten a Midiman DMAN 2044 (used, $75) but I haven't even installed it yet so I don't feel too attached to it. I'm going to be multitracking vocals, synths, guitar, and MIDI. Basically, I'm wondering if I should:

1. Keep the Midiman 2044 and get an external effects unit and compressor (Lexicon MPX-100 and RNC come to mind). The obvious advantage is the lack of overhead on the CPU compared to software and the superior sound to most sound card DSP processing. Also, I always like having that physical knob to turn as opposed to some flakey software slider.

2. Ditch the 2044 and get a soundcard with built-in effects processing, like the Yamaha DSP Factory or Lexicon Core2. While you lose some of the flexibility of external hardware, thanks to the major price cuts on these cards this would cheaper than external processing. Also, these cards' DSPs are based on high quality hardware (MPX-100 for the Lexicon, REV500 for the Yamaha).

3. Keep the 2044 and just do effects processing with software plug-ins. I don't know much about this, but from what I've heard, the quality can be questionable. You also lose the ability to do zero latency monitoring with effects.

Any advice is appreciated.