Yes they do create quite a bit of heat, I didnt think it was so much until I tried stuffing the ballast into a small enclosed space where it got very warm. But compared with the light itself, I think it amounts to probably 10% of the total heat being generated(but I just made that number up) If your running your lights in cool tubes then it could be quite a big fraction of the total heat produced.
You can always keep the ballast on the outside of the grow room. but then your room is less stealth.
I think If I were to buy a ballast right now I would buy either a 600w or a 1000w MH/HPS 120/240V Magnetic ballast, because they are cheaper and from what Ive read more reliable. unless someone can convince me otherwise.
I watched a video once where a big time grower was talking about how he Hates the digital ballast because they strike too hard and it wears out bulbs way faster. He uses a light intensity meter and measures the initial intensitiy and monitors all his bulbs switching out when they get to only 60% initial intensity. He also buys the cheaper bulbs rather than the high end pricey bulbs because he feels its better to swap out the bulbs more frequently to maintain a higher intensity from the bulbs. These were oppinions of someone who had been growing for a long time and had learned things the hard way, but he may be a bit old school and biased towards older technology. Would like to hear some more oppinions based on experience
Edit: we all know how hydro store employees/owners like to convince you to buy all kinds of stuff you dont need... well I asked for a dimable ballast when I went into the Hydro store and he convinced me to go with a magnetic ballast because he said digitals burn out bulbs faster and especially the dimable ballasts. according to him dimming your lights hurts the bulbs drastically. He could have made more money by selling me a more expensive product, so I trust there must have been some experience going into his advice.