I can't afford good monitors currently so I'm just curious.
Good headphones for sure over bad monitors.
When I worked on God of War 2, I hated the Genelec 1029's that Sony had set my room up with. I tried to use them for over a year and just could not get used to them. So, I gave up and designed most of God of War 2 using my Sennheiser HD600 headphones.
These days, it is the total opposite. I am very happy with the sound of my room and my JBL LSR 6328/6312 system. I never use headphones, unless I'm recording something.
speaker monitoring is as much about the room as it is about the speakers. Cheap monitors can still give decent mixes in good sounding rooms, and excellent monitors will still lie to you in poorly treated rooms - especially in the low end.
headphones will lie to you with regards to relative balances and stereo fields - even good ones - because you're plugging speakers right into your ears. Headphones also have wild swings in the midranges. Check out the frequency plots of your prospective cans at this site:
My advice would be to settle on the cheap monitors, and spend a lot of sweat equity treating out your room to sound flat. Compressed fiberglass and fabric can go a long way. Later on you can upgrade your speakers.
Headphones for a short period of time, but you will find that your ears become much more fatigued with headphones as opposed to monitors.
Headphones are workable, if you "calibrate" yourself to how the stereo spectrum can be used (as in, how it needs to sound to sound somewhat correct and not "crooked" from a stereo speaker setup). Calibration can be simply done by listening to well-mixed material using the headphones and paying attention to the pannings and stereo image. The biggest difficulties are extreme pans, i.e. finding out how far is too far, and how all sorts of phase differences and the use of stereo expanders will be exaggerated (to the point of sounding "crooked") in speakers.
In frequency response headphones usually beat monitors in an uncalibrated (i.e. acoustically uncorrected) environment.
Watch out for the base! I've heard so many mixes done with headphones where the panning is quite good but the sub is working like non stop. I use headphones at home and the studio for the final mix.