Re: audio tours, for the past 4 years, we've had a portable CD-ROM player here at the Getty.  I've learned a number of things including what I think is the best technology - the one you don't notice.  

Choosing cassettes, CD-ROMs, or MP3 players depends upon your site:
Art museum or historic site?
High volume of visitors or small?
Special exhibition, permanent exhibition, or both?
Content best in a linear form or random access?
Are you going to charge or are the players free?
Will you have narrators only or narrators/interviewees?  

Ann-Eliza, in answer to your questions:
1. Digital players allow the visitor to choose what they want to hear wheras tape tours control the order of information delivered.  I think our visitors like the freedom of the digital random-access player.
2. It may seem cheaper to produce the audio in-house, but, frankly, it's a lot of work.  Our involvement in the production is the editing of scripts and it's quite time-consuming.
3. Depending upon who you lease the audioguide from, they may assist with the handing out (although we do this ourselves with staff and volunteers).  More importantly, they can maintain the players (they're much more capable of repairing - or replacing - a player.  Think of what happens with a 1 lb. player is accidently dropped 4' on a marble floor.
4. The most important hidden consideration we've found is the promotion and handing out of players.  If you're going to put the time and money into this object, make sure you let visitors know.  Also, whoever hands out your audioguide should be expert in explaining quickly and simply how to use the player.  No one visits a site because of the audio tour.

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