Here's my experience:
I have played about 120 gigs with my Line6 Flextone I plus a Line 6 1x12 box. So it was 2x12. This set up moved a lot of air! We were playing in a trio, playing Texas Blues and man it sounded great and I could cut through the band effortlessly.

In this vid, you can hear my 2001 set up (you can hear me play, but can't see me, because the drummer only filmed his a**!) Anyways, I was in love with the sound I had at that time and it was all MODELING.
http://www.box.net/shared/nprxh7ia8e

I have also tried a deskmodeler (Line6 POD - the kidneybean) played directly into the P.A. at a live gig. The sound was lush and I didn't like it.

I hated my FlextoneIII. I bought it, because I thought it would be better, but Line6's technology went worse at that time and it was no comparison to my old Flextone, which I still use. As I couldn't cut through, I sold the III.

Here's the conclusion though:
When I bought my Marshall JTM45....let me tell you....this was like somebody hitting me saying "see my boy, this is the real world"! Only then I knew what I was missing all these years.

For practical reason I still gig with my Line6 FlextoneI (sessions, rehearsals etc.)
But at a gig, I want to have the best sound poossible and this can only be achieved with my JTM45 tube amp.

I am convinced that modeling technology is superb for home and also studiorecording. Once you've heard an axe fx....but that's another story...

Never compromise on live sound. Tube is still the sh**!