The track extension packs (1, 2 and 3) convert the old style circuit 1, 2 and 3 to the next circuit up. The Sport Digital set and all of the sets released in 2004 have new style circuits and the extension packs don't do the same as before.
I wouldn't recommend going for the extension packs just for the sake of it. Work out the track sections that you want, and can use, and then work out the best way to do it. Its possible buying the track seperately would be a better choice.
Buying a standard set is a good option. Its a great way to get the track cheap, plus it will give you a standard power base so you can run non digital if you want to. Its also worth looking at getting a second digital set as the cars, controllers, power supply and lane change sections would cost £130 on their own.
I'd suggest sitting down and making a list of what you want, and then working out the best option.