In a Asterisk PBX system, is hardware echo cancellation necessary?

Spend the extra money.

I'm running my second Asterisk box and wouldn't do it without echo cancellation. I know it's a painful cost but since we make hundreds of outbound calls a day I wanted to take every step possible to eliminate echo (ie we are the source of the echo). I did this even though the only analog line we use is for our fax machine. Most of the folks we call are on analog lines*. Why are we on our second box? Because echo cancellation failed on the first.**

Here's a decent source concerning echo cancellation:

http://www.voip-info.org/wiki/view/Asterisk+echo+cancellation

and

http://www.tmcnet.com/voip/0306/leaders-in-connectivity-products-0306.htm

Also, look into the effects of echo on local calls and long distance calls. I believe that the delay (increase in echo) will be much larger for long distance calls for VOIP.

Get into the nitty-gritty:

http://www.voip-info.org/wiki/view/Causes+of+Echo

*We typically didn't hear the echo... those on the other end did and complained bitterly.

**We couldn't take the first server completely offline until we had a working replacement.

This is an old question, but since I ran across it I thought I'd contribute to the conversation.

We've been using an Asterisk PBX for years now and tried several different types of hardware. I'd ABSOLUTELY recommend hardware echo cancellation in any installation. We tried lots of software solutions and the generally crappy echo cancellation in the VOIP phones and ATA's and nothing worked remotely as well as real hardware echo cancellation in high quality hardware.

We ended up using Sangoma A200 boards for our application though I suspect the Digium TDM cards with hardware cancellation would be fine as well. I really can't emphasize enough how much better the call quality ended up being.