I'm looking at getting a new acoustic guitar, since I've been playing for almost three years on my cheap starter. The one I was looking at was the Martin custom D classic (which I believe is based on the D-15). Now it comes in rosewood and mahogany, with the rosewood being 100 dollars more. Is the extra 100 bucks worth it?
What is certain is that rosewood and mahogany project sound differently, but often the luthier's skills and craftsmanship in putting the guitar together can have an even greater effect on the sound than the back/side material. So there's no simple answer to that question. The difference is mainly driven by the price/availability of the material, not necessarily because one kind of wood is "better" than the other.

Suppose you have two guitars with the exact same dimensions and features, except one has mahogany side/back and the other rosewood. The ideal thing would be to blindfold yourself first, then play the two guitars in random order so that you would pick out what you prefer purely based on sound. Otherwise, what can happen is that you let your expectations influence what you hear in your mind, as though the rosewood guitar has to sound better because you paid extra. (By the way, mahogany is becoming very scarce and climbing up in prices day by day, and soon it may become more expensive than Indian rosewood itself.)

So to sum it up, play the models first and decide for yourself which sounds better for you.
Thanks. That was the original plan, I was just wondering why there was such a big price gap between two seemingly identical guitars.
All it is is that Rosewood costs more to get hold of. I think (could be wrong though) that there might be a little bit of inflation there because it has a certain prestige but its mainly the cost of getting the wood.
They both sound different and there are a few threads around and a few websites around the detail the differences, but playing them is obviously going to be the best way.
All $ aspects aside, and just comparing apples to apples here, this is what the Martin site offers for an explanation of the sound characteristics of each wood type.

Very resonant, with a deep warm bass. Sources of supply have been well managed, reliable and of consistently high quality."

Much lighter in weight than rosewood, koa or maple. Yields a surprisingly strong, loud sound with an emphasis on clear, bright airy trebles."

I myself prefer the sound of Mahogany over Rosewood because of it's brightness and clarity. I think the wood is very pretty too, with it's gold colored highlights.