I had been using N-scale (1:160) for my entire model railroading "career". However, in July 2008 I decided to switch to S-scale (1:64). The primary reason being that the larger scale is much easier on the eyes. HO-scale never really appealed to me, and O-scale is much too large, especially when you start looking at structures. Also, the larger your modeling scale, generally the more expensive the hobby gets.
The secondary reason for switching scales is that S-scale's engines weigh more, which means they track better and therefore don't suffer from stalling and derailing quite as often. Also, due to S-scale's larger volume, it is easier to install DCC decoders and even sound decoders in the engines, including small switcher engines. While O-scale would give you even more space, due to their heavier weight, they tend to use either two motors, or much more powerful motors. This makes DCC decoder selection and installation more complex. Newer S-scale locomotives use the same or similar motors that are in HO-scale locomotives, so DCC decoder selection is trivial. In late-2012 I converted my S-scale engines to use battery power, which is (currently) impractical to do in N-scale.
I have an article (diary) on this web site about the process of changing my favorite modeling scale.
S-scale is one of the least popular scales in which to model, but that doesn't mean that it is impossible. There are a large number of manufacturers who produce product specifically for S-scale, or whose products are usable in S. However, patience is required. Also, some scratchbuilding may be necessary if you want something specific, but that can be true in other scales as well. I have found that track laying, DCC installation, and scratch-building is much easier in S-scale than in N- or HO-scale (I have done some HO-scale work for friends).
"S" is generally associated with the toy trains of American Flyer. However, there is a vibrant community of true scale modelers within "S". And my prediction is that eventually the "scale" side of "S" will be dominant. Within the scale side of "S" are those who model standard gauge (American 4', 8-1/2" track gauge), narrow gauge (Sn3, Sn2, Sn42, etc.), and trolley modeling. Within the community there are also people who flag their layouts as "hi-rail". These are modelers who essentially use scale-looking track with scaling-looking equipment, but whose rail height may be a bit taller (code 148 and up), so that they can still run some of their old American Flyer equipment. Generally, these people are caught between scale modeling and still using some of the American Flyer from their collection, and they will generally use wheels with large flanges and the old A.F.-style claw couplers. The true toy train enthusiasts will use only American Flyer track, A.F. accessories (many of which operate), and run their trains at rather fast speeds. Each has their own interests, but we all have equipment that is to 1:64 proportions.
In December 2011 I was appointed the webmaster of the NASG's web site. The NASG is a non-profit organization that helps bring S-scale modelers and manufacturers together to help promote the scale. It also helps organize an annual convention held somewhere in North America (usually in late July or August) to bring us together. On the NASG web site I actively maintain a listing of current manufacturers, retailers, and dealer links (see the "S Resources" page. There is always something new coming out in S-scale, so there is also the "News" page. The site has an RSS feed, so if you are at all interested in "S", I invite you to subscribe to that feed. There are also many articles, organized and validated links to external S-scale web sites and videos, photo galleries, and local club information.