To me, I guess it depends on what you want. If the DJ would simply stand there and play music, then I say use the iPod. Either way, you're really picking out the music (or the general feel of it), and if the DJ isn't going to add anything then why spend the extra $$.
That being said, if you don't know exactly what music you want, or don't want to have to fuss with the iPod/timing/song order/etc. Then the DJ does add some extra value.
Just my two cents.