Server advice VPS or Collocation?

Dear Tek,

I am wondering what your thoughts are on using VPS vs dedicated server hosting. For basic needs - like running your own forum or collection of websites VPS seems like a really good choice. But for long term growth, is it wiser to go with your own collocated hardware?

For instance an application that is experiencing viral growth that is designed to scale linearly with horizontal addition of servers - which would be preferable? I've been looking at prices for VPS'es and comparing to dedicated server costs - at the end of the day, its about the same. VPS does offer an ability to move and change hosts more rapidly - which is a big plus.

Anyone have any experience with this? What are your thoughts?