if you're trying to save money to put into production gear, keep in mind that you'll be able to play your own stuff on cd's a lot easier than trying to get test pressings done.

cd's will be more expensive for decent gear to start, but it won't take long for the total cost of ownership, including new music as a cost, to become lower than vinyl. Sure you can pick up some bargains on ebay, but you'll be hard pressed to find too many of the tracks you want, even 2nd hand, for $2 each on vinyl
i'd suggest getting pretty good cd decks though, really cheap ones won't be fun to use for long, you'll just get bored with their lack of features. cdj800 or dns-3000/3500 will keep you amused for some time.

cd all the way!!!!! now u can download WAV file on beatport.com which is amazing!!

as much as i hate to say it... (as tubby already said) in terms of total cost of ownership, the cd/mp3 route is the way to go.

if building up your collection of music if your priority, it's much easier on the wallet to go the cd route. you will have some serious song selecting capabilities in 1/2 the time at the most vs. going the vinyl route.

go to beatport and see what $100 worth of wav's will get you.
then go satellite, or ebay, etc... and see what $100.00 will get you.

no comparing the two.

i wouldn't really bother factoring the cost of equipment... because you could find either cd decks or comparabley priced direct drives (no, they don't have to be technics).

if you start w/a cheap mixer, then don't worry about the sound quality of 320K mp3's... you definatly won't hear the difference them and wav's, no matter how good the rest of sound system is...