In order to answer the question of to renovate, or not to renovate: it is important to be clear about why you want to renovate and all the costs involved. Sometimes renovating is not the answer and it's better to purchase a new home that better suits your personal style and functional needs.
The two main reasons people renovate are to meet their own needs and to increase their selling price. The benefits of renovating for oneself are living in a more modern and personalized home that reflects your taste. However if you may want to sell in the future, it is always a good idea to get an opinion from your realtor as to which renos make sense and then to pad your budget in order to deal with unexpected costs.
The benefit of renovating to sell is increasing the value of your home while making it more attractive to potential purchasers. When renovating to sell it is important to determine the value of your home in relation to the other homes in your neighbourhood. You want to be sure that your renovations aren't going to over improve your house out of the price range of people looking in your neighbourhood.
The best person to answer the question to renovate, or not to renovate: is you.... Hopefully in conjunction with your real estate advisor. The answer depends on why you want to renovate, cost calculations of renovating versus moving and an understanding of how the new value of your renovated house will affect you when it's time to sell.
For helpful tools and resources to help you decide whether renovating or moving is right for you check out http://www.genworth.ca/mi/eng/index.html. If you would like some assistance in reno-planning, please let me know!