I work for a large local government organisation who are about to embark on using SharePoint to replace our ageing intranet with an all-singing all-dancing collaborative sit
Without knowing your complete requirements, Windows SharePoint Services 3.0 (as opposed to Microsoft Office SharePoint Server 2007) is a good solution. Licensing is free and it works well as the framework for public-facing websites. Using WSS 3.0, you'll be able to take advantage of your MOSS 2007 infrastructure, administration, and user training. I have developed a number of successful public-facing sites using SharePoint for various customers and am happy with the results.
This link provides a comprehensive comparison between WSS 3.0 and MOSS 2007:
http://office.microsoft.com/en-us/sharepointtechnology/FX101758691033.aspx
Being on the tail-end of building one of the largest public-facing, pure web CMS sites on MOSS 2007 (extranet/intranet/internet), I can say quite confidently that it absolutely blows as a CMS. Collaboration portal? Pretty decent. Document management? Not bad at all. WCMS? Awful. Horrible. Stay away.
Why? Sure you can make it work, as there are plenty of examples out there. You can look at the finished product from the outside and it might look pretty decent. But you have no idea how much pain, frustration, cost overruns, delays, and general badness happened to get there. Trust me, it can be quite a lot.
Can SharePoint be used for public facing web sites? Oh yes, indeed. If you have your doubts, check out this site: http://www.topsharepoint.com, where you'll find sites such as Ferrari, Volvo Cars, Library of Congress, Carlsberg, Viacom, KPMG and a lot of other high profile company or government organizations.
Admitted, there can be accessibility-challenges with SharePoint if you rely only on the Out of the Box-features from Microsoft Office SharePoint Server(MOSS), but in time even these issues have all been addressed. The ARF is a nice example of how some of these issues have been addressed (and now even web parts can be made to validate). Another is AKS, which even has Microsoft officially involved. A third is BKS.
If people are still making non-validating sites in SharePoint today, it could very well be because they haven't researched thoroughly or aren't prioritizing it.
If you look above the challenges of validation, I would say since you've already decided on using SharePoint for intranet, there's very little reason not to do so for your public sites also. A lot intranets running on MOSS are in fact based on it's CMS-templates, because then you get the best of both worlds. All the collaborative features can, for the most parts, be easily enabled for CMS-sites as well. In fact you get a very mature, enterprise-ready, scalable product i MOSS which also includes a range of other features like easy code-package deployment, enterprise-ready search, workflows, scheduled server-to-server content deployment, detailed user-management and a long list of other features.
I could go on and on about SharePoint, but in closing I just have to say that even the free WSS-part can be made into a CMS system, proven by sites such as Tozit and CompleteSharePoint.NET. You will most likely also find, that should you need consultants or hire people for the job, it's easier to get SharePoint-people on board than Umbraco, simply because of the big community supporting the SharePoint-platform.
I don't agree with Martin that the high licensing cost is the main issue. The main issue is that Sharepoint isn't designed to be a CMS for public facing websites. Ever looked at the HTML that Sharepoint spits out by default? You can fix all those issues but I've spoken to people who did that and they all say that it doesn't make sense to use Sharepoint for your public facing website. So if accessibility and interoperability are important don't use Sharepoint.
I'll agree that sharepoint is great to build an intranet.
I think umbraco is the best cms for public facing websites. It's designed to have full control over the input, you can integrate any website design (No limitations) and you can use your existing .net controls. That's why I've chosen Umbraco as the default CMS for my customers in 2007.
Cheers,
Richard