The lower PPQ's are more accurate, less jitter, mostly because they are closer to what the operating system can reasonably handle accurately. If you try to go for too much precision, then sometimes the OS will deliver exactly on time and sometimes it will be late, thus jitter. If you use the lower PPQ, then theoretically....the OS is more likely to have time to deliver on schedule. But a lot of that depends on how the software is implemented. But I do know that I read this in a midi C programming book once, that lower PPQ will result in less jitter.
As far as drums and timing accuracy, I hear you. consider this though. 240 PPQ is 480 ticks per second at 120bpm. That is essentially a 2ms level of precision. That is not really a musical form of quantization but its also barely audible by only a few golden eared people. 480 will give you 1ms if you want. If you can live with the random jitter. RTGraham says he didn't notice much difference going to lower PPQ, but that he always had 1-2ms of jitter anyway. (shrug).
The hardware pieces undoubtedly have much less jitter, but if they are set to 200PPQ internally, then in a sense, they are introducing the same low precision that 2ms of jitter will give you.
Regarding hardware timestamps...to my knowledge the only midi interfaces that ever did this are the MOTU's (possibly not even all of them), the one from Emagic and Steinberg made one also. At the time I remember hearing that you had to use the MOTU one with Digital Performer and the Emagic one with logic and the steinberg one with Cubase, in order to take advantage of the hardware timestamping. However I had some email exchanges with MOTU a while back when I was thinking of using my MOTU midi interface with Logic on the mac and I was told by him that the timestamping should work with Logic too. I will try to dig up the email if people are interested.
This was done at a time when all of the sequencers were suffering badly from Win2k-itis. Since then the XP midi handling has been improved sufficiently enough that they no longer need to market such things. I'm not sure if the Emagic or steinberg interfaces are made anymore, but the MOTU's still are.
Regarding the older MPU-401. My understanding is that it did not actually timestamp midi events in the hardware. The timestamping of midi events happened in the card's driver software. However, those older midi cards were interrupt driven. So when a midi event came in, the driver would usually trump anything else that was running on the cpu to immediately timestamp the event in the driver. Personally I had terrible midi performance with an MPU-401 and early versions of cubase, so I can't say it was any better, but I know the driver is where most midi interfaces timestamp the events.
The difference with the MOTU interfaces is that they timestamp the midi event in hardware the instant it is received on the midi port, then the driver will eventually kick in and use the timestamp that was already created by the hardware. You still want the driver to react as quickly as possible because if you are playing a VSTi or something in realtime, you want low-latency. But the accuracy of the timestamp in that situation is based on an earlier timestamp that did not have to wait for the OS to give the driver time to do it. The only dependency is whether the MOTU driver passes the hardware timestamp along to the host DAW, which MOTU told me once that it does. So as long as the host software is using the timestamp created or recognized by the MOTU driver...then it should be the hardware one. If Sonar makes its own timestamp(which would be dumb), then jitter times would be much much worse and hardware timestaming would be moot.
Playback, however is another story.