:( Damn, I'm still on XP at work and XP on my laptop at home. At work my boss won't shell out for anything new. At home my laptop doesn't have drivers for Vista or Win7 :( I'm now one of those people everyone hates for holding the internet back!
(Not really - lol - I got Firefox installed up the wazoo!)
My SO just went to Uganda to volunteer in a primary school. It was a right faf to organise and was completely chaotic. I'd pay a few hundred just for the peace of mind that someone who isn't a complete moron was working out all the details.
In one of my first jobs as a coder we had little crappy PCs for development. They were ok, but a bit slow. When I left I wrote a polite email to the CEO pointing out the same thing - lag time x wages per hour x number of people in the team. A week later one of the devs emailed me and said they'd just recieved amazing new machines.
It's not always clear that faster machines really produce net productivity gains, unless the employee's time is already saturated with work. The net gains may manifest themselves into lower working hours, but the company can't just then start paying employees for 7.5 hours instead of 8 (although it can let go of 5% of the workforce to the same effect).
Coming from Cornwall (a rural part of the UK) I can't tell you how much we spend sending sales people to the cities for face-to-face meetings.
I liked the bit about VCs from Silicon Valley Vs Boston. I see London VCs, Parisian VCs, German VCs don't even get a sniff. Most amusing, and so very true. I think that may be more evidence for the argument.