Let me preface this by saying that I am employed by a major window manufacturer. That being said, I have been involved in replacing windows for over 30 years and have learned a thing or 2 along the way.
Vinyl & wood, along with fiberglass, aluminum and composite windows all have their pluses and minuses. In addition to that there are different methods to replace windows. the 2 most common ones are, full frame replacement, where everything gets torn out down to the rough stud opening and everything gets replaced including interior and exterior trim. And pocket replacement, where the existing window is gutted but the frame, interior and exterior trim remain. This method is somewhat dependent on what type of windows are existing.
It ultimately boils down to; what features you want in a window, such as ease of cleaning, low maintenance, energy efficiency, aesthetics, etc... How much you are willing to spend. And what you want the finished product to look like.
Out of the 5 types of windows I listed above, my preference is an aluminum clad, wood window. I feel it gives the best of both worlds with a low maintenance exterior and a wood interior.
Ron is correct in that replacing windows is a relatively straightforward process, providing that the new windows are sized correctly. Proper flashing and installation techniques are CRITICAL. Do your research thoroughly, and follow the manufacturer's instructions to a T. Failure to do so will result in a voided warranty and worse, a window that doesn't perform well. Most of the major manufacturers have posted installation instructions on their websites. Take a look at them before you commit to one.
Keep in mind that you may need some specialized equipment such as scaffolding or an aluminum brake. Be sure you have everything you will need on hand before you start. Nothing will get the people you live with madder than big holes in the walls of the house.
Hope this helps,