[mp3jrick]

OTS used to convert and read it's own files yes.
But, they now read .mp3 files and create a seperate .omx file which holds gain, intros/outros, comments and other file specific data.
OTS probably leads the way with respect to auto play mixing, I like to set my own cues and mix. Mixmeister leads the way with auto beat mixing with neary perfect auto pitch control, sync and key identification for the musically impared.
It's all up to you and what you intend to do with it.
I know some really skilled OTS users that swear by it. I owned 2 copies but ditched them for several reasons.

If you are going to set up and run several demos you might run into some conflicts.
These little quirks have caused me some trouble in the past.
PCDJ 5.2 will import, read and list the .omx file as a track in your record case.
PCDJ FX/VRM will scan and store the file sensative data with the .mp3 file which changes the overall size of the file. Virtual dj id's a file by its byte size which once changed by the PCDJ VRM or FX scan renders VDJ lost trying to find files that have now been changed in size.
Most of these programs have data scans that must be run and take many days depending how large your library is, so you don't want to screw it up.

Jim,
If you are seeing anything called Red VRM or the program runs in full screen, you have the latest creation.
Personally, if I were getting into this, i'd be deciding if I want to use a controller or not.
Some guys are just as happy with keyboard shortcuts and track balls.
OTS does support Hercules, but that is regarded as somewhat of a toy and plastiky.

If you want an interface that matches what you are using for cd players, look at VDJ. It also supports the DAC 2 controller.

PCDJ on the other hand, has the most versatile controller out there IMO.

As you venture down the road you will find yourself learning the conflicts and ins and outs of each program. To master them all is a really hard thing to do, so take your time.
It will take quite a while to become acomplished and comfortable, don't give yourself a deadline, it's not just button pushing as many indicate.
Mix in a set of .mp3 along the way until you don't feel like doing the discs anymore.

Welcome to the party