Trek said.. True. Depends if you want to just join in races or actually win them. VMG has been the primary instrument used in the Americas Cup for the last 20 years.
Yes, but you can also win national titles against AC guys, pros and Olympians without using VMG instruments.
VMG on wind instruments usually refers to the cosine of True Wind Angle x boatspeed. ie Your speed into the wind.(regardless of where the mark is)
VMG to a lat long position will be different. As you sail towards a layline your VMG will drop and if you tack/gybe onto that layline your VMG go up and be the same as boatspeed since you are heading diectly at the mark.
VMG as understood by the former definition has its issues. A boat has momentum so as you head up your VMG will go up nicely and then drop badly as momentum bleeds off. ie You can't steer to it. A tactician or trimmer may keep his eyes on it but you have to average it out in your head. This VMG also relies on accurate wind angle and boatspeed inputs so any raceboat needs to attend to calibration constantly or the information will be rubbish.
VMG in the latter definition of a GPS input can be handy as long as you understand what you are seeing.
I agree with Chris. Keep your eyes out of the boat and read wind on water for best info.
RIngle, Chris, good points. The starter of the thread asked what instruments should he get for racing. I forgot, a compass might be handy.
Re the VMG to lat long, I had great success with it helped by the fact I designed the system I used so knew what I wanted. But absolutely right, a better speed to a mark cant compensate for a tactical blunder caused by not looking around or a bad start.
When using it the numbers were never stable, it was as mentioned always necessary to slightly hunt up and down to find the best peak each time. But downwind much easier. One boat I had went from regularly at the back of the fleet to regularly at the very front and thats how we did it. Aside from reducing tactical blunders.
An iPad or iPhone in a waterproof cover (Lifeproof Nuud or Dog&Bone Wetsuit) and iRegatta Pro for $12 which does everything the dedicated instruments do and much more and RaceQs for tracking and analysis. Pair them with a cheap sunlight readable Pebble watch for remote control and remote output.
I suppose if you sail boats that are on their ear in single digit wind speeds you kinda don't need instruments. 
and its not on its ear either 
