Platinum flyer here. Cash is better.
When you look at the extra costs having (annual fee) and paying with (2%+ extra) and paying off any interest no frequent anything is worth it, nor credit card points.
The only reason I fly with Virgin is because their times are perfect for me, and their prices are
usually the best, or close to it. I flew the equivalent of to the moon with them last year.
The Lounge is very so-so. You do get free alcohol, but I don't really feel like much before I fly home. The food is super plain, the best you can make is a ham and cheese sandwich. There was a super thai soup but that's been discontinued.
I don't even take luggage, not even carry on so luggage is useless. They know frequent flyers don't take much luggage by the way. The best thing is being up front of the plane I guess. That's my reward.
If you have Qantas Gold they'll move you straight to gold on Virgin. That was hardly a loyal thing to do for the rest of us that had been flying Virgin all this time, eh?
Pro-tips:
Since Tiger has a new CEO, previously the CEO of Virgin Blue, they have the best on-time record. Some airports they've moved into the main terminals with everyone else. The only downside to them are the hippies they attract as passengers.
Jetstar will beat anyone's price if the flight is within an hour or so of their flight, by 10% (or is it 15%?). It's in small writing on their website, have a look.
Summary: You'll save a LOT more by shopping around and paying cash for all your items instead of trying to accure credit card points, that are worth next to nothing.