For the non-giging musician who only records in a home studio: what would you recommend
Usually software or rack, but it depends on your preferred approach to playing. A nice thing about the software is that you can record the guitar's DI'd signal, then you use the amp emulation software as an insert plugin, which means you can change amps and FX at any point in the recording process - an obvious bonus for studio tweakheads. That Marshall you used that sounded so good during tracking isn't playing nicely with the strings during mixdown? Swap it for a Vox or a Fender without having to re-record the (hopefully) perfect take. The benefit is it's all "in the box", so there is no additional D/A or A/D involved, keeping the recording clean. It's also possible to neaten up your recordings via direct editing of the uneffected wav file - you can shift notes in time, or even pitch without having to worry about reverb and delay tails, etc. - which makes for more natural-sounding editing results.
If you prefer to print your FX direct to tape (to use the olden studio vernacular), then hardware is the way to go. Usually rack, as that fits in to the whole studio environment - floor units just get in the way and gather more dust. In a rack it's also fairly easy to use a patchbay to re-amp recorded tracks (even non-guitar ones) with it as an outboard processor. If you DI the guitar you can also change amp and FX at any stage, but remember that every time you resort to using outboard gear, it's another D/A and A/D stage in your chain.
While pedals are more of a "live" approach, they can also work in the studio. If you print your takes directly and are constantly switching fx in and out while playing, they do make sense. Also if there is a very specific sound you can only get from a very specific pedal, then obviously that's the way to go - some guys have a very close and personal relationship to their pedals. You'll already know if you're one of those.