It sounds like Paul, Matt and I are all in agreement, that gears can be better than chains, but you have to be a little more careful with the design.
I especially agree with "face width is your friend" and machining the gears (and sprokets too for that matter!) to remove excess weight.
BTW Paul's treatment of epicyclic or planetary gears in the white papers section is very good. I've been using his equations to explore some strange corners of the drive world.
