First let me start by saying I am no authority on MIDI guitar systems, I have played a couple but I am in no position to say that A is better than B. Having said that I have tried guitars fitted with MIDI pickups and there are definitely limitations as well as in some cases latency that make it difficult to play fluently. Alternatively there are products like the You Rock Guitar, which obviously has huge limitations but excellent tracking due to it not really being a guitar so much as a hybrid synth/guitar. The future for me has to be software, something that can take an audio signal and somehow magically convert that into a format that can be used to trigger synth plugins or external hardware with no latency. This is where Jam Origin come in with their new software MIDI Guitar.
Jam Origin are a small team of engineers who spent the last 6 years developing a disruptive technology which transcribes the sound of guitars in real time into MIDI, polyphonically without any hardware. 200 guitarists and studio musicians have been beta testing over the last year and version 1.0 is finally ready and available to purchase from their website (free download trial available).
MIDI Guitar (and MIDI Bass) are available for both Windows and OSX as well as iOS and there is also a dedicated version specifically for GarageBand. I will be download a copy asap to give it a test run!