Why are hand-built wheels considered to be better than machine-built wheels? I would think that a machine-built wheel would be better and cheaper, since machines generally do a more precise job than humans.
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I think a machine-built wheel can be just as good as a hand-built one, and vice-versa. This is probably an algorithmically solvable problem, so given fair conditions, both man or machine - following the same rules for truing a wheel and tensioning the spokes - should achieve indistinguishable results.
There are three factors, though, that enter in the game:
Hope this helps!
One thing is that the spokes need to be different to facilitate the machines doing the lacing (or at least this was once the case, according to Peter White).
But certainly a machine can produce a decent wheel more cheaply than one can hire one hand-built. It's more a question of going beyond "decent" to "better" quality.
(BTW, I recommend building (or rebuilding) your own wheels a few times, if you're reasonably mechanically inclined. There are good step-by-step instructions available from several sources (including Sheldon Brown as mentioned in another reply), and it's a not-too-unpleasant way to occupy a few winter evenings with bike-related stuff when you can't be on the road due to the weather & darkness. You may not even do as well as a machine, but you do get a sense of accomplishment, and it makes wheels less intimidating.)