MS or Phd?

While answering queries on higher studies in the US, I frequently face this question : Should I apply for MS or Phd ?

The common thing I hear is "If you apply for MS, there is less chance of aid, but Phd comes with aid. On the other hand, Phd is difficult to get into, MS is easier."
I think this is a very wrong way to look at things. If you are willing to dedicate five or more years of your life into research, go for Phd. But a good job with quick good money is your aim, MS is the way to go.
However, after two years in the US, I feel that everybody should apply for MS first and then decide about the next step.
1)Right after B.Tech, with almost no research experience, it is difficult to decide for the next five years. Quite a few friends of mine came here for Phd, and half way through realized research is not their cup of tea, and quit.

2)Sometimes, the choice of professor and university may not work for you. I know one person in our university who came for Phd, and in the end, the prof and the guy could not stand each other. He had to leave the US without even an MS.
It is difficult to know ground realities from there. You can change your adviser, but, its not always possible, and probably wont be in an amicable way.
3) Your profile may not be strong enough to get into a Phd in your dream university. Same way you should want to have a first hand experience working with the professor before committing five years, the professor also prefers a person he has already met and worked with. In the absence of that, he will be extra careful in hiring Phds, and even if you deserve it, you may not get it.

Here is what my opinion on doing the right thing:
1) come for MS. Most likely it will be without aid. ( Read in my previous posts, to see how most people manage to get almost free education here)
2) Initially you may or may not be sure if you want to go for a life of research..and on what.
I have seen crazy transitions: Friends coming for Mechanical Engg and ending up being a statistician.. ECE to computer vision etc etc.
Talk to people, get to know the professors and their work and take diverse courses and start working on research under a prof.
And from your friends in other universities, you will have better idea about those places too.

3) If you have convinced yourself that research is the way to go, talk to your profs whom you would like to work under. In most cases, application for Phd is just a formality once your prof knows you well. If you feel your department does not offer what you want to do, you will be in a better position to apply to other dept.s or interdisciplinary areas.
Also, witha decent GPA, and some research work and your prof's blessings behind you, you will be able to target higher ranked universities for Phd.

4) I have seen that in many cases when you commit for Phd, your funding starts, even from second sem. (Before the qualifiers!)

I would like to know what others think about this.