I faced the same choice a long time ago and decided to use high-rail track and switches and simple DC power. High-rail allowed me to run my first American Flyer set from 1952 as well as almost every release of S scale product with the exception of more expensive brass items. Had I chosen scale track, I would not have been able to run Legacy steam and diesel locomotives without extra or extravagant costs. My track is American Models flex track, code 148; but if Fox Valley were available then, I would have chosen their smaller 138 track. All couplers except those on the old AF models are scale Kadee 802/808 versions. Track is not the problem with either scale or high-rail wheels; it's the switches. There are some workarounds with Fox Valley switches to allow both types of wheels to pass, but I have not experimented with them.
As for power, straight DC works with all models except some older American Flyer TMCC/Legacy models such as the U33Cs, Mikado, Pacific, and Challenger. The Y-3 and modern diesels work with DC. I can switch in Legacy AC power to run the older AF models and the newer Legacy equipment with all the features available if I like, but I find myself more often running most everything but the TMCC locomotives on DC because it's simpler and at 4-10 volts applied to the track instead of 14-18, a bit more comfortable.
Although I like DCC and its open architecture, converting to it would be an expensive and time-consuming project. Lionel has done a very good job with Legacy features and sound; and in my calculations, Legacy gave me the most desirable features of DCC at less expense--but with the limitations of a proprietary operating system.
DCC does allow you to add sound and better control to the simple DC American Models locomotives, and Legacy equipment such as the newly revealed American Flyer Pacific in "fantasy" AT&SF livery will work with DCC. On the other hand, Carl Tuveson offers a way to add Lionel's electronics to American Models locomotives so that the Santa Fe Northern can run on a Legacy system. Now that American Models and Lionel are the major suppliers of 1/64-scale equipment, high-rail wheels/scale couplers is a powerful attraction unless highly accurate modeling is an important criterion. A decision at this stage as to the type of wheels and power source will keep your initial investment costs lower, but S does offer a lot of flexibility if you change your mind at a later time and are willing to invest more.