I owned the DC-1, then the MC-1 and now the MC-12, so I'm a bit of a Lex warrior, but I think the MC-12 is a huge step forward. The build quality, always a shortcoming for Lexicon, is superb. Aesthetics are much improved (though I could imagine some will not like the look). I love both movies and music on the system and think that both are greatly improved by the MC-12 over the MC-1, as well as the fact that it now supports analog-pass-thru which the MC-1 did not. I don't use it that way, but many have reported that it performs very well in that mode.
I find 2-channel to be much smoother than the MC-1 - the speakers are much less identifiable as a source of sound, the soundstage considerably more coherent. I don't often use the Logic7 music mode, but if you have any interest in this type of sound mode, I think this is the best.
Clearly, I'm not entirely unbiased, though my comments come after putting out my own money to own the unit and I have no personal gain from getting you to buy one. I find the MC-12 to be a major upgrade over the MC-1 in basically every way. I think Lexicon makes the most user-friendly yet powerful pre/pros on the market. And, finally, Lexicon has a long history of offering aggressive trade-in policies for their new products which is the only kind of "non-obsolesence, upgradeable" claim I can personally believe. -Kirk