In some ways this is a bit of a stupid question (as the answer is likely fairly obvious), but it is subjective as well. I've been playing guitar for about 17 years, but I've never really invested the big bucks in the high end gear. Right now my working guitar is a mexican made Fender Strat that I bought for about $320 bucks 7 years ago. I'm seriously considering upgrading to a REAL guitar - by that, I mean a tele or a strat in the $1,000+ range. My concern is that I'm going to shell out the coin for this holy grail of equipment, only to be disapointed that its not SIGNIFICANTLY better than what I'm currently playing. Heck, I could go to musiciansfriend or whatever and buy four lower end guitars for the same price (epipone les, strat, tele, and a SG, for example). Or, I could just upgrade my pick-ups for my current guitar (tex-mex so I can sound like Stevie?).  Party, this is my attitude towards things in general ... good enough is good enough. What I really wonder if a higher end guitar will make such a difference that I'll be playing and saying to myself, "Yep, this was indeed worth it." Any one care to weigh in? Thanks!

...here's an analogy to ponder: which is more important, the car under the paint, or the paint on the car?

...in other words, it's not the looks or flashyness but rather the feel/playability and sounds that matter. So, first, go "play" as many (visit all the music stores around you locale) different models and types of guitars that interest you. Then, consider them all by cost, availability, and desireablility (to you) ...then, finally, go out and buy that ONE guitar that best suits YOU.

...remember, I bought my guitar for ME, so what I play might not best suit you or anyone else. You gotta treat guitars like girlfriends...YOU pick'em, not your friends!

Personally, I could care less about the proverbial "paint on the car". (well maybe that's easier said than done ... everyone wants a good paint job ...).  Actually, one of the best guitars I've played was of a buddy of mine who had some freaky Squire strat that had incredible tone and such a great feel to it. In any case, thanks for the input. There's really no definitive answer to this question. I'm going to get a high end axe and I'll let you know how it works out. Worst case scenario is that I have another guitar, and there's nothing bad about that!

FWIW -- with almost 50 years of playing behind me, my gear consists of:

1968 Fender Telecaster
1976 Ovation Balladeer
2002 Gibson ES-135LE
2004 Ovation EA68 Viper

1969 Fender Super Reverb with JBL/D110Fs
2002 'home-made' VibroClone with JBL/D130F
2004 Line-6 Spider II

...as you can see, nothing fancy.

Dear McStrat,
As OTM has told you good advice.  It must feel gool to you.  Up and down the entire neck.  Regarding sound:  Make sure that when you test drive these new axes, you set up the amp to play clean.. No FX.  Reason is that a LEMON AXE with the right FX's can sound pretty good. (Mufflers on your ride.  You can get it to sound real meaty with out the MEAT). You might concider the shape of the neck.  Many different styles and shapes.
Best of luck and God Bless. 
Rohn (AKA: Hairy Mountain Man)