Keef,
I saw, at the PFA Rally, a "low-cost" mode C transponder on the CAA stand. Nice idea, but only a two-year life before it would have to be thrown away and replaced by a Mode S.
I thought we had until 2008.
I'm about to purchase a Mode C transponder for my new toy, and hope to get more that two years use out of it. Mind you, I only got 8 months use out of the last new aircraft before vandals destroyed it, so perhaps I shouldn't be worrying about the lifespan of the transponder.