Pot or cooler based mash tun?

Cooler as Mash Tun

Pros: Relatively cheap and easy to modify with a bulkhead fitting and ball valve. Holds a steady temperature very well. Lighter weight, and therefore easier to clean.

Cons: Cannot be direct-fired, so any step mashing has to be done with additional infusions or by decoction - step infusions will increase your mash's water-to-grist ratio. Will not perform double duty as a kettle (but can be used for cold beverages).

Kettle as Mash Tun

Pros: Can be direct-fired for stepped mash schedules. Can be used in advanced homebrewing setups such as RIMS or HERMS systems. Can double as a kettle.

Cons: Higher cost. The kettle is not insulated, so it is harder to maintain a steady temperature. More difficult to modify to add a ball valve. Heavier, and therefore harder to clean, relatively speaking.

How to choose?

It comes down to your budget and personal preference.

I have used a cooler for 466 batches over the last 17 years. I have tried using a pot to mash in and found I preferred the cooler because it held the temp so well. I seldom find a need to do step mashes and in fact question their value. But when I want to do one, it's a simple matter to simply infuse boiling water until I get to the temp step I'm going for. You can see my equipment and methods at www.dennybrew.com