Be wary of buying flights as you go. Many countries will not grant entry unless you have proof of onward travel. If you do your research then it shouldn't be a major problem, but having to buy two countries ahead isn't my idea of flexibility.
I think I'm lucky living in the UK as RTW flights seem to be much cheaper here (than starting in the USA for example). Price wise it's a bit of a no brainer for me. I can get around the world for about £1500 (about US$2400). I've even heard of americans getting cheap flights to London, and then they buy their RTW ticket here. Sounds crazy doesn't it, but they saved a wedge of cash.
Anyway, I know where I want to go so I'm not bothered by buying in advance. It means I can budget more easily as flights are taken care of. Also, a reasonable amount of flexibility is built into most RTW tickets.
£1500 for a RWT??? Can I ask where you got that baby from and where it will take you??. Seems an excellent price, the type of price i'm looking for