I try to spend as much as I can on things that I kmow will last, like reels or motors. But I go cheap on the things that I know my kids will jump on and break a lot, like rods and sunglasses.
If something has a good warranty, I will spend some extra bucks for it.

I feel that more often than not however that buying the mid range models, not the uber expensive products and not the cheaper than dirt models, but those models of products that are in the mid price range of a company's products is probably the best option. These generally last for a good amount of time, and when they do fail if you happen to get a crummy item it does not cost an arm and a leg to replace. Also once a new fancy technology comes out you did not already put too much money into a product to the point that you can no longer afford to buy the next new product with the next new feature.

Now there is no way I'm spending that kind of money on fishing gear. I have a family that I have to support. 99% of my fishing is done on a $30 Shakespear combo. I've been fishing with it for 6 or 7 years and haven't had problem one. My "Go To Lure" is a Cotton Cordell Diving minnow in a Purple/ White color. It cost a grand total of $1.96 at Wal-Mart. It produces every time. And if i lose it, it's no big deal. I can't even fathom what I would feel if I lost an 8 or 9 dollar lure. And as I once read: A poor craftsman blames his tools. Or in other words, If you can't catch fish just because your using a $30 combo, you shouldn't be fishing. Just my opinon though.

See?!? That's insane. That reel is not worth $640. Period! I can show you a reel that will stand up to 2, maybe 3 lifetimes of raging bonefish (and carp) and is one third that price!

Barely related, but here goes. Lexus vehicles. Why buy them? For about the same money, buy a BMW that is faster, handles better, gets better gas mileage, will last 3 times as long, and the maintenance is paid for.

We as consumer need to crack down on the insanity!

rjw - you can bet your buttons that Manhattanite doesn't know dip about putting either to work! Great analysis there. Quite true.

There are alot of good points on both sides. A $700.00 pair of waders isn't in my future because I just don't believe that the fabric exists that will stand up to canyon slides and brush. I would rather by a 100.00 pair every year or two because I don't think a $700.00 dollar pair will last 7-10 years the way I fish and certainly not a lifetime.
Reels are the same way. I like to fish with 5-7 rigged rods (spinning gear) and I don't have 150.00+ for each reel. The $50-70 dollar ones last about 4-5 yrs, sometimes longer. I fly fish less and spend about 250.00 - 300.00 for each rod reel combo because I expect and believe they will last a lifetime. I guess because I use and sometimes abuse my equipment I don't want to have a heart attack when it breaks, and it will break. So far I have found that mid range gear from quality names is the best value. It works well and will last if you take care of it. I build some replacement into every years budget and that seems to work the best.
All that being said, if the Powerball ever hits you bet I will buy the sweet stuff. Lust is a terrible thing. I will never trade my Chevy for a Range Rover and you could't drag me to Manhattan with a team of horses but that BMW M5 might just find a spot in the garage next to the Sage and St.Croix.

some expensive things perform better then cheap things its true

I love fishing and yes I spend money on my stuff (more then the wify likes), but I don't ever go that crazy. My ugly sticks are the best. They work good and if they break I get a new one. I do however buy nice reel. Even there $50-100 is about my limit. They last because I take care of them. I have some cheaper stuff that I use for the kids, but I am slowly replacing them with good stuff as the kids get bigger. The place I really skimp is with lures. I have 2 Rappalas. I have only ever caught about half a dozen fish with them. I figure if I am going to use them I better not break the bank, cause all they do is get lost. I fish a lot. Sometimes this is done in hard areas to fish, so tackle goes quick. I think it is good to pick your battles with this stuff. Buy mid range reels, but take good care of them. The rest of the stuff you can be frugal with if all you fish for is small to mid size trout.