My guess ... it's really your preference ... most people won't be walking around the fair with their favorite pic in hand.  If you set up in a tent with a backdrop that is light in color and uniform, you could take the pic and have an easier pic to work with, controlled lighting, and a composition you're comfortable with.  Any digital pic over 3.5 mega pixel is of higher quality than what they currently scan 35mm negatives at so a 5 mp digital pic will yield more detail than 35mm and may be an advantage.  There is so much to this topic it could go on for days and never be anwered but ... if you've got the ability to take a QUALITY pic and work from that you could certainly charge more money as well ... sitting fees, processing, patterning, cutting, matting, framing ... "custom" work in the truest sense.  Just my thoughts, and I've thought about it a LOT!!  *LOL*  ~Andy