I'd certainly pay a good amount for a boxed set. It would be worth it to have every episode at my fingertips like that.
However, I'd be considerably less enthused about buying some kind of piece-meal "Best Of" collection. To me, the whole point of being able to buy a series on dvd is to have the whole thing from start to finish. I certainly wouldn't be able to afford the whole series at $13-$17 per two episode disk! ($624-$816!!!)
A quick look at HIT's web-site does not encourage me. It looks to me like they tend to pick out the few they think people will remember best and forget the rest. I don't see any boxed sets on their web site. Somebody please tell me I'm wrong.
I'm planning on buying this first one as soon as it comes out, It'll be great to see the Fraggles in nice DVD quality.... but I really, really hope it's followed up by a boxed set, otherwise I don't think I'll have the money or patience to buy the whole lot of them. Pity.