LOL iv had some major arguements with my cousin over this very subject,
Working with audio
pro's: easier to see what your doing and fine arrangement and you can manipulate the audio better in my opinion.
con's: can prove a bit tedious, you are fairly commited to a sound once arrangement has been done, only option is to import another sound and start again with laying it out
working with a sampler
Pro's: easier to lay out, you are not commited to a sound e.g if you decide after adding a new bassline you don't like the kick, because you would often load a fair few kick samples into one patch (well i do) its easier to simply move the MIDI notes up and down or try different layers
con's: can be longer to demix a drum group if your only using 1 sampler (solo bounce each track and re import or assign individual instrument to individual aux/bus track), alot more cpu intensive (problem if on small machine) wont see the actual drum placement on the arrange window
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