Renting still worthwhile?

[John Schnyderite]

I bought a condo for personal residence 5 years ago.  It has dropped in value as most have seen in that time.  My wife and I are now looking to buy a larger home.  We are able to qualify for both mortgages, so we are entertaining renting vs selling.

We currently owe 150K and the last 2 comps in my complex went for 146 and 150K.  While I may break even on what I owe, I have put 13K (though the 7K tax credit helped) into renovations on this condo on top of paying two closings on this condo out of pocket.

Alternatively, I could rent at a $100-125 loss each month. I am 3.5 years from PMI being removed from my mortgage, which would probably put me in the positive if I decided to keep renting. I've never been a landlord before, so I guess my questions are:

1) Is it probable that I recoup the $1500-2000 I take out of pocket each year come tax time, while my principal is paid down?

2) Would the risks of having vacancies and repairs urge you to take a definite but defined loss now vs a possible loss later?