Sorry to dredge this up when the post is as old as it is.... Since I posted my reply, I have kept up with the various posts, and opinions here and there regarding shop vacs, dust collectors etc... And here's what I have found...
There is a LARGE amount of debate as to how well shop vacs, and dust collectors work under various situations such as sanders, planers, jointers, saws etc...
From what I have read, and now personally experienced, a shop vac based dust collection system can be a VERY effective dust control solution.
Filtration, vacum, and CFM are key. Generally speaking, sub 2 micron filtration is best. For a vac, that would be a HEPA rated filter. Vacum pulls with more force, CFM means how MUCH is getting pulled. Shop vacs produce a lot of vacum, but low CFM, dust collectors the other way around. Shop vacs tend to have a good reputation for keeping the air clean around particularly dusty operations such as sanding. However Dust Collectors seem to work better at clearning chips and such from planers, and jointers...
Many modern woodworking power tools, such as planers, jointers, band saws, sanders, table saws etc... are equipped with 2.5" shop vac dust collection fittings. This may or may not be a good thing. Many others have 4" which is sized more for a dust collector...
If I had the space, and $$ to build my shop EXACTLY how I wanted, I would probably have both a good DC, AND a shop vac setup for sanders and such, not to mention shop cleanup.
One item to note about the Shop Vac... If your vac is used a LOT for sawdust, you will have to tap out the filter fairly frequently to keep suction up... I found this out the hard way... Simply remove the filter, empty the canister of course, and gently knock the sawdust out of the filter, preferrably on the driveway or other surface outdoors...
As I build, and learn, I am likely to change my ideas on the subject... I hope not. I have a pretty decent investment into a good shop vac and a shop vac sawdust collection system...