I've done botha, and I vote "iterative" as well.  Velocity seems to stay 
higher, and you can still make the bean counters happy by regularly discussing 
overall budget, timeline, and number/complexity of changes.  It may not work 
for all clients, but I'd definitely encourage defining and trying both methods.

Sean, it would be interesting to learn what source code repository + ticketing 
system you use.



>> You can't budget on "pay us $X an hour and we'll see where it goes."
>
>That's how a lot of agile practitioners do work tho'... very
>successfully (for both them and their clients).
>
>But I agree it doesn't work for all clients. 

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