Ultimately I know there is no right or wrong and the choice will be mine and mine alone, but I'm thinking some of you may have been through similar decision processes so I thought I would ask for experiences and opinions.
Current Ride: 1997 Specialized Ground Control Comp. Seals are shot on a 2000 Judy XC fork. In 2009 I put a new Risse shock on the rear which was a true upgrade, but the rear end is still loose in turns. Other various fixes over it's life. Ancient design. It's done.
I could buy a new 29er at about $1000 or a FS at about $1500. Either would be lightyears ahead of my Specialized.
Or, I could build up a perfectly serviceable hardtail using a frame and fork from Performance/Nashbar/Jensen/eBay and all the other parts from my old bike. A quick look found frames from $99-150 and forks from $95 (Marzochi) to a RS Tora SL at $179. Including extra bits and pieces, I'd be riding for about $250-$350.
I do a lot more road riding than mountain biking, but love being able to get into the woods on two wheels. XC trails (Lake Fairfax, Fountainhead for anyone in the DC/NoVa area).