We have one here at work. I'd say there's plusses and minuses to the rotozip and router, at least with respect to cutting rings in MDF...

Rotozip
+'s
- small (you could operate it with one hand)
- creates less dust
- a little quieter
- I can usually cut a circle in one pass very slowly, but I guess you could do the same with a router if you went slow enough...

-'s
- bits tend to snap easily
- hard to keep it vertically straight while cutting... the base is very flimsy
- the circle jig that came with it is pretty useles. It wont cut smaller than 4", or larger than 12", so that eliminates a lot of options
- the bits are pretty weak and prone to flexing while you cut, so sometimes the cuts end up angled

Router
+'s
- bits are bulletproof, always cuts straight, jigs are easy to make/set up, much more flexible tool overall

-'s
- creates an ominous dust cloud if not connceted to a dust collector
- loud as hell

I myself prefer the router, but each to his own...

Thanks Ex-Maxx, I suppose the bits aren't cheap either?