http://www.ceibo.com/pdf/Diff51.pdf

If you can't break when, for example, a memory location changes value, then you have software break points. This doesn't mean that you can't break in real-time. But software breakpoints do have some limitations.

With hardware breakpoints you can do some rather complex "conditional" breaks....really helps to track down bugs. I personally think this is the most valuable feature (next to single stepping of course) that an emulator provides...more so than trace.