Your experience with soldering (or desire to do so) would also impact your choice. I have a full 40 pin DIN Propeller implementation on a large solderless breadboard. It has:
The Propeller Chip
The 32 KB EEPOM
A MAX3232 for RS232 communications
3.3V voltage regulator
5 MHz crystal
SD card interface
Various connectors as needed (see below)
I also bought some way-cool connectors/adapters that give me PS/2, DB9, and VGA, pre-mounted onto mini breakout boards and ready for insertion into the solderless breadboard. There are other connector types as well.
This setup obviously favors prototyping over final design, and I'm not sure if I'll get any strange effects from having the solderless connections (and associated jumper wires). When I have something I want to build permanently, I'll need to go with Jeff's protoboard idea. I'm just not very good at soldering...some more practice will be in order before soldering real (and expensive) stuff.
From the little research I've done on this, you'll need more I/O lines to the SID chip than the Hydra provides.
A protoboard might be a better choice. I've got a Hydra - there's an expansion port on it with a full 8-bit parallel port and control lines. The port is shared with the VGA interface, so you have to choose one or the other. The Hydra also comes with a plug-in prototype card (one blank, another with a 128K EEProm) that plugs into this port. That might be enough I/O to hook up a SID, though it leaves little else free without hacking into the Hydra itself...
Any quick and easy methods of converting the +5V from a development kit into the +12V for turning the SID's analog side on?
Looks like it doesn't DO much with it, only 25mA per chip, so 50mA would handle stereo audio.
I've had the maxim parts suggested to me, which are nice, but work much better when laying out the full PCB, and have some serious high-frequency design considerations that make me nervous to use them.