I'd say hardware is somewhat better, if you can afford it. However Software is quickly catching up. I use fruityloops 3.56 and soundfonts from good modules like, triton, mo phatt, xv-5050,alesis etc. Drum programming is real easy compared to manualy punching them in on a mpc. Fruityloops supports direct x plugins, Vst, and other effects. The main problem associated with software is finding good sounds. If you have somewhere to get good sounds, then id say go with software.
-ill3k