I've been thinking about this topic a lot lately, probably much more than I should be :/
Today I went to a lute concert (a duo) and both lutenists were playing without nails on gut strings (gut frets too.) And the sound was lovely, it was easily loud enough to fill the whole small sized auditorium that the concert took place in. I've been listening to lute more than ever at this particular time in my life. I've really come to enjoy it along with vihuela and baroque guitar (oh and ukulele too). And it seems like in this genre the preferred technique is to play without nails.
I think if there were more famous classical guitar players today that played without nails it would be a more popular technique. Anyways, I like what's happening as of late (especially on this forum hehe) and on YouTube and places like Rob's site.
It's funny to me that the sound isn't even that different, especially to someone who doesn't play. The differences are subtle enough and to try to describe them in detail might be sort of silly as sound is a pretty subjective thing...but here's what I have come up with so far:
Nail-less playing - smooth, delicate, creamy, buttery (all adjectives that could be used to describe dairy products as well!)
Nail playing - articulate, penetrating, bright, loud.
Obviously, these are generalities as one can play smooth and buttery with nails or penetrating and loud without them.
Do whatever sounds good to you as you make your music.
I'd like to add that I've never had problems growing my nails, I've just cut them off to experiment with nail-less playing. It's been around six months now, here's my latest effort: viewtopic.php?f=48&t=103640
I DO think that long fingernails are quite disgusting, though...IMHO :p