I'm in the last phase of designing and completing a large MOSS upgrade to SharePoint 2010 for a Fortune 100. No third party tools were used, and I thought it would be usefull to list some findings:
* We used a Content DB hybrid upgrade path like some mention in the previous comments.
* Because of this, we had far better control over the processes involved
.* We achieved an unintended result: we mastered the understanding of the Farm and realized it's capabilties and limits.
* It ensured more granular enforcement of Best Practices at all stages.
* Money saving was not a factor for selecting the Content DB Hybrid upgrade path as most 3rd Party tools were relatively inexpensive (compared to the licensing for a 8 server farm within a virtual environment running a 16 CPU Blade Server).
* The process was tedious, took many hours of technical design and upgrade testing. We needed advanced level developers, consultants and architects and constant calls with Microsoft Tech Support. There needs to be an adequate budget for this
.* Cleaning up and perfecting most major issues on the MOSS environment made it possible for a clean upgrade without too much reworking, though some elements could not be avoided.
* We achieved a highly customized and optimized Farm which may have been hard to accomplish with 3rd Party tools.
* We ended up with a dozen or more custom utilities and PowerShell scripts that in a nutshell "probe, adjust, review, update, report" on various aspects of the Farm far beyond the pre-upgrade advisor. But these are reusable tools that can be utilized going forward to ensure a healthy SharePoint 2010 environment.
In my opinion 3rd Party Tools would be handy for the scenarios such as:
* Company does not have an extensive IT Department and is unable to hire architects, consultants and business analysts for the migration.
* Farm does not require a high level of customization and optimization.
* Existing Farm is a standard out of the box MOSS environment.
* Has a company policy that allows use of external tools as an accepted practice.
* Don't care for the inner workings of the background processes, just want the job done.
Under these circumstances, a 3rd Party Tool makes sense, but it won't be all magic. I'm certain there will still be hurdles and fixing to be done.
