hardware vs software
There are pros and cons to both. It really depends on what you like, your budget, and what you aim to do with your music. Most producers use a good mix of both hardware and software. Software is cheap and very versitile, but sometimes it can't compare to the hands-on feel of hardware. Hardware is powerful and phat sounding, but not as versitile as some software proggies. For example, the real TB-303 is the most DOPE sounding machine EVER made (If you don't believe me listen to Uberzone's "Botz")!! A real 303 growler or "wow" sound is impossible to clone via software. ReBirth tried, but you can't fake the funk with analog circuits!! However, the TB-303 had no MIDI implementation, no echo, no distortion, and none of the nice features ReBirth has. Another good example is the Virus B by Access Music. They have a software version for ProTools and a hardware version which about every producer and their gramma uses (even me). The hardware version is MAGNIFICANT for making and tweaking patches. Knobs galore. With the software version, you are stuck with a mouse and editing is very time consuming. Also, a lot of hardware is able to be edited via software proggies, which combines the best of both worlds. For people starting off, I would recommend at least 1 expensive piece of hardware with lots of knobs (the Virus B or Nord Lead 2) and editing capabilities. Before making any purchases, research what the gear can do. Spend some time messing with it and make an educated buy. Don't buy Reason because someone else recommended it. See if it's for you. I spent an entire summer testing the Yamaha CS6X at the music store before I bought it. Try out everything and do your homework. That's the best advice I can give you. And rule #1 for samplers - DO NOT BUY A HARDWARE SAMPLER EVER!!!! Use a software sampler!!!
Here is a list of my main gear...
Hardware:
Yamaha CS6R with PLG-150AN card
Access Virus Rack
Novation Drumstation
Roland MC-303
Novation A-Station
Korg Prophecy
Roland JP-8000
Software:
Cakewalk 9.03
GigaStudio 160
Cool Edit Pro
ReBirth
There are some kewl proggies out there - Reaktor, Absynth, Reason, etc. but they are way too complicated for their own good. Once software starts being as easy to use as hardware, I'll vouch for it.
Hope that helps
Cheers!
JP8000Lover
PS You can't use Reason as a sequencer. Reason only controls it's own system and does not send MIDI messages to outside synths. Even if you could, Reason's sequencer is the worst sequecer ever invented!
PPS Loop-based music is for newbies!!!! Yes that means you fruity-loops users!!!! 
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