When it comes down to it Hardware rendering in my opinion is much better in the long run. Many higher end graphics cards that nVidia and ATi have completely smoke a CPU in it's tracks when it comes down to these kinds of jobs, as after all, that's what the video hardware was made for. I find software rendering to be useful for initial purposes (such as getting very basic textures/objects drawn up) as it'll use the less power, but when you're done with the initial stages and are starting to make things such as games or are moving from low resolution textures/objects to high resolution, offloading them to Hardware entirely, with minimal Software rendering involved is the best choice. Just take a look at Adobe Flash. Even though it has Hardware Acceleration on it, it minimally uses the hardware for rendering and still taxes the CPU. Right now Adobe and nVidia are working on payloading Flash onto nVidia GPUs, so Flash should run loads better on PCs with slower CPUs but compatible cards..
If you want to see an example of the difference between Hardware Accellerated/Hardware processed design vs. Software Rendering/design, just open up a game that has PhysX support with an nVidia GPU/an AEGIA PhysX card, that can be toggled on and off. Spawn a crapload of Physics objects (50,000 objects should do it) and create mass physics. Do this twice, once with the CPU performing the work fully, and once with the dedicated hardware solution doing the work. You should notice immediately that the dedicated hardware will smoke the CPU in terms of Physics. Even my Intel i7-950 starts to choke when I do mass physics on my box with PhysX on GPU off and Multithreading enabled. With GPU PhysX on, the video cards take care of all of that, leaving my processor free to do other things, and it actually keeps framerates loads higher (as the GPUs will process physics either on one card, or in between frame renderings depending on how I have things set up). Every time I perform these mass physics tests whenever nVidia updates their drivers, I'm always running the game as far as I can push it graphics wise, and Multithreading the game. The GPU Physics processing beats the CPU (software) every time.