Without a doubt, I'd go for the quality. Staying in a great hotel can be a large part of the fun of a trip, and I agree with the posts above that there's a world of difference in the level of service you get.

I've always preferred the Intercontinental's SCC over any number of points. The reason is simple. I don't really travel that much so have little chance of making an elite status that way. Therefore, when I do travel for business, I want my hotel to be working for me, even if I don't have enough "points".

When I'm at a high-service hotel, I know that my phones, fax, shower, etc. will work or I will immediately be accomodated. Issues will be handled promptly at any time of day. Any item or service that I need will be given, within reason, on demand. If I need to get something from outside the hotel, it will be gotten. I'm in control. The hotel is incentivized by the size of the bill.

A high quality hotel can make you a more effective traveler, especially if you don't travel that much.

That doesn't mean I advocate that true "road warrior" stay at high end hotels. They are usually much better equipped to deal with the little items that would stymie me.