In my studio I use Nuendo in a dual CPU Mac G4, and I have purchased a lot of high end plug-ins. I have done a lot of work here both commercially and for myself. I also work in and maintain another studio with a Protools HD system. Here's my experience FWIW.
When I started off with DAW recording, I was fanatical about keeping everything in the digital domain once it was recorded. I have a Yamaha 02R desk, which I feed 24 channels digitally (TDIF) from the computer. The reason I keep the console is that while the 02R has poor preamps, as a desk it sounds fine, has EQ's which are very good for most remedial work as opposed to real tone shaping, and it allows me FX sends, Cue mixing, slating, talkback, you name it. The big one though is that it has no problem summing as many tracks to stereo as I can throw at it, it is full of DSP's designed to do just that and it does it better than any internal computer mixdown.
Back to the original post, I did all my compression and EQ with plug-ins until a while ago when I had a conversation with a friend with protools and he mentioned that he got a much better result with sending tracks out to his Distressor and back in, rather than using the various plug ins such as the BF 1176 plug. His comment was that all the plug ins had a "samenes" too them.
So I came home, loaded a vocal track and proceeded to re-record it over and over via the A/D and D/A path of my MOTU interface to see how many stages of going through conversions until I started noticing artifacts. Suffice to say, I now couldn't care less about running a track out through my converters, into a Urei 1176 and back into the DAW, and then simply zooming in and visually aligning it to the original track, which I then mute. All of a sudden it is like the old days - it is so easy to pull a great bass or vocal sound when you just feed it through an 1176, Vocal Stresser or Summit TLA-100, I regret all the messing around and tweaking I did with the plug ins.
I never get the result I want from plug ins, it is always a tweak-fest. I never use delays or reverbs in a computer, even a cheap unit like a Kurzweil Rumour, TC M.one or Roland SRV 3030 eats most plug ins. Anyone who says otherwise probably has never A/B'd the two directly and is talking from "memory". Not to mention CPU overhead.
Altiverb? Sounds great doing real accoustic space emulations, which is neat for classical and film work, but for rock and roll real is not usually best, colored and interesting usually rules here, I know you can ping it with an impulse response from a 224XL or whatever, but it is so CPU intensive, and with people foolishly getting rid of their desks and just using plug-ins there are plenty of good cheap hardware delays and reverbs out there second hand now which don't load your CPU, are hands on tweakable and have a resale value unlike software.
After making an entire album using software EQ's and compressors in the computer, and then doing the next project feeding outboard compressers and EQ's via the converters back to the computer, I will never use another plug-in on an important track element again, not only for sonic reasons, but also because it is so much quicker to get the desired result, even with the alignment time included.
While I am up on my high horse, my bemusement of plug ins took a furter turn for the worst when I did a shoot out between various virtual instruments against the real thing. A virtual Prophet V, a Yamaha CS-80 plug in, the Virtual PPG, and virtual Korg MS-20. The idea was simple - play the real thing beside the plug in through the same system. Some plugs were better than others, but all sounded like thin, papery MP3's beside the real machines. The CS-80 plug was instantly recognisable as a CS-80 sound, but was so thin sounding as to be laughable. ( BTW I must say that despite the fact that I now own 2 CS-80's, I used a CS-60 for this test just because was much easier to move, and even the CS-60 which has half the voice layering of an '80 still ate the plug in). So go for the plug ins for convenience, but really I think they are just hard work to make sound passable.
Well, there was a bunch of opinions from me, I'm sure many will disagree, but I really believe hardware rules, and in the spirit of The Lab, why be satisfied with a cheap Behringer sounding plug when you can use a nice piece of outboard? Don't worry at all about the extra conversion steps, modern converters are good enough to do it, and the sound of the real outboard outweighs any tiny damage done by the converters.