I have purchased based on appearance and based on pedigree. As to what has worked for me so far, a little of both. I have the tendency to go after the show champions more than anything, but have realized that spending tons of money on some of these champions was a waste because I've produced just a nice animals out of 1st and 2nd place animals as I have the champions when paired properly. I have been very surprised by some lines that I never expected should do well, and then I've had GSCs to throw mediocre animals I'm disappointed in. Either way - each animal is a breeding tool if you find the correct pairing.
I do have a couple of lines that I line breed based on a certain animal in the line. For instance, I have an excellent Shoots male with a sire that's M1885 - all 3 of his females have M1885 as their grandsire and were purposely purchased for this reason. Every single animal that I own with M1885 in the lines has shown well on the table, produced very well for me and seems to have consistent quality. My reserve champion male of show at York this year and my reserve section black velvet male at Nationals were out of M1885 lines. I own more of this animal in my lines than anything, but I also use this line to outcross to animals outside of Shoots lines after the one generation of line breeding. My mutations have really increased in quality from using these animals and my standards are getting better and better.
In other cases, I have purchased 2nd place animals on the table because I knew the lines and knew the genetics were there. If the price is right and I can use it in my lines, I go for it. I tend to believe that some traits take two generations to build up. Some may take even three. Patience is the key. On one generation, you may get good clarity and density, but you're lacking in size. So paired with the next mate for size, you've got a better chance in getting a clear, dense, larger animal.
I have one pure standard female that took a 1st at a show - I personally didn't expect it to take above a 2nd due to size. I knew her parents were very nice animals as I had spoken to the breeder about her, and realized I had some of her lines at home. The breeder put an awesome price tag on her, and I grabbed her up. I knew she carried size in her lines, and I paired her with an animal that has the same grandsire as she does, and her offspring has shown better size so far. Would I have purchased her based on her appearance that day and show placing? No, I purchased her because I knew the lines.
I do purchase based on appearance though - depending on what qualities I need in an animal to compliment the one needing a mate. I tend to make a list of animals I need as mates and the qualities they must have to compliment before I impulse buy at a show.