Sugarbytes Effectrix...

If you have a good ass midi controller and an effect like Glitch, or those fine Reaktor ensembles theres no reason why not to use software.

Although a little time consuming, but way worth it is to bounce a section of audio to a trimmed measure, import it into recycle to convert the wav/aiff to rex, use sage converter (BTW you need Stylus RMX) to load the rex file into stylus, use the chaos designer. Bam, gnarly glitch.

Yes, Rexing is wonderful...
In Ableton Live, you can throw in the audio, and use the slice-to-miditrack function and get the whole audio inside a Drumrack module for glitching...

And, my favorite mangling plugin of the moment, Sugarbytes Effectrix.

This is the best unit I've encountered :)