I have a quandry. I can't afford to spend more than a few hundred pounds on guitars at any one time. I have a pretty decent strat clone (G&L SC3), and an epiphone Masterbilt acoustic, annd now I'm looking at buying an Epiphone Sheraton 2.

So the pattern is that I buy cheaper, but - what I think are - decent quality, versions of classic guitars.

However, I might be able to persuade the wife to let me spend £1200 or so on a Korean James Tyler Variax if she thinks that it will be the last one I buy for a good decade or so!

So do I put the £500 or so of the Epi Sheraton towards the Variax and get every guitar I want in one go, or do I continue to buy cheaper Epiphone's and Chinese/Mexican Fenders to build up my collection.

I don't gig and if I did it would only be jamming with a few mates.
I'm confused... Are you asking whether you should buy the sheraton or the variax? or are you asking whether you should buy the variax or continue to buy cheap guitars?

In the first case, I'd go for the Sheraton.
In the second case its a bit of a toss up. I'm not a fan of variaxs, I dont think they really do THAT good a job of emulating a huge number of guitars, but it might still be better than buying a couple of really cheap guitars over the next few years.
Sorry, it's the second case I'm interested in.

Should I keep buying cheap guitars (because I can't afford a Gibson ES335 and a US Strat and US tele etc), or whether I should pay much more than I normally do to get the Variax, knowing that I wont be buying any more cheap guitars for a while.

Plus it will also let me play around with drop tunings easily .