There are strengths to each approach.

I used to three box Everquest (1), via three computers.
Had no software or even broadcast options.
Just moved from each keyboard and mouse as needed.

Multiple computers don't need to be as strong individually.
And a monitor per toon is nice as well.
At the same time, this takes up more space, and will use more juice.
If one PC crashes, the team is not automatically all dead.

As far as WoW goes, I've only ever software boxed.
Keyclone and Innerspace are both excellent options.
There are probably other strong options to consider too.
Innerspace is a really nice option, a very strong and flexible program.
I've not really found anything I want to accomplish which cannot be done with it.

One strong PC will likely cost you less then five moderate PC's.
With Symbolic Links, Junction Points or Virtual Config files, you can adjust options for each account individually.
I'd imagine you could stick to the upgrade every 2.5 years model fairly well.
You can easily run two or three monitors on newer video cards, for screen real estate too.