Its sort of as if the last 2 years never happened!
How many people are in negitive equity or under the threat of repossession due to their desire for the biggest house possible and the most arcane way of financing it?
There are other ways to save for your retirement than sticking a load of money into a house and if you have a small mortgage you can choose which one is best. If things go pear shaped again (deffo on the cards with Osbourne) then a small mortgage gives a large margin of safety. A small mortgage also give the opportunity to get away more, spend more on beer etc.
All the points about advice based on experience of the 70's are right. Borrowing quickly looses value with inflation so it made sence at the time to go big and there was tax relief etc. Its no longer relevant.