I have an original POD 1.0 and the Korg Ampworks. I like the Ampworks a little more than the POD, to my ears its tone is a little better, especially on the "Fender" and "Vox" type sounds (for the Marshall tones, I think the POD nails them better). I do a little 4-track recording with them but mostly just do a lot of late-night playing through headphones with them.

I also use the Ampworks as a pre-amp for my Pignose a lot, a set-up which sounds great played in stereo with my Vox DA-5 amp. Korg is owned by Vox, and for the Vox DA-5 amp, they more-or-less just simplified the Ampworks features some and built them into the amp...with the Ampworks modeling though, you have the options for different "head" sounds and different "cabinet" sounds, and that really makes a difference. Neither the Da-5 or the POD 1.0 gives you the option to switch "heads" and "cabs" and you can really get some nice different sounds that way.

I wish the modelers gave you more control over effects...many effects you cannot combine. With the Korg Ampworks, you can't combine reverb and trem for example, which is frustrating because you can get a pretty good fender tone and I like to play a lot of surf-type stuff. They corrected this on the DA-5, they have a combined reverb/trem setting but unforthunately the Fender tones aren't quite as "there" as they are on the Ampworks.

In general though I agree that pedals sound better than modellers, especially the higher-end pedals through a good amp - But modellers are sure convenient and give you a lot of bang for the buck.