No-one's really mentioned the big reason you go with rack-mountable servers: the hot-plug, diagnostic and all-round keep-it-working-24x7 of them. For example, a network card failed in one of our HP Proliants recently, I pulled it out of the tower on its rails, looked at the little diagnostic lights, open the top, pulled the card out and pushed a new one in. If it wasn't for my colleague shutting it down when he noticed the problem, it would have started working as if nothing untoward had happened.
Tower system are not built like that, you will often have to shut them down, manhandle them onto a bench (or get on your knees) open the case, remove cards with a screwdriver and generally work on them as if you're rebuilding them.
If you don't mind downtime, then the tower is a good, quieter, cheaper (significantly) option. If you need continuous uptime, then buy the rack server and put it somewhere away from everyone else. If you have to put the server in your office, DO NOT buy the rack-mount one as your ears will not thank you.