There is - in my opinion - no such thing as a good simulator. A simulator simulates and can thus never do an accurate replication of the events.

With Emulation becoming cheaper and cheaper (Cygnal $99+, LPC $400+), why even consider simulation.

Another issue with simulation vs emulation is that if you have some special I/O to simulate, you have to write the simulation of that and then who knows - is the bug in the simulation routine or in your code. If you emulate, you will be driving your actual hardware and there is no need to write 'test code'. Of course with an emulator the question about the location of the fault can be hardware or software but that question will be there regardless. Also with an emulator you can toggle port pins etc which is an invaluable hardware debugging aid.

Erik