Fat Client and VPN vs MS Terminal Services

I have been approached by someone who has a main office with a couple
of servers, one of which is an Exchange server and multiple branch
offices ranging from 20 users to 2 users per site. Their main aim is
to;
1. Centralise their messaging. At the moment the main office uses
Exchange, some of the branch offices use POP from an ISP and some
branch offices have no email capability.
2. One of the servers at the branch office has an accounting
application which has some sort of web front-end capability which they
want to make available to all the branch offices.

Now I'm trying to decide on whether to suggest;
1. Fat clients at all site with ADSL using VPN to the main office.
Possibly locking down the client with policies. Using Outlook and
Exchange, and IE to the application portal.
2. Using Microsoft Terminal Services, possibly with a locked down
desktop. I don't think Citrix is an option because of the cost,
although to be honest I know nothing about Citrix.

So I suppose my question is, what are the pro's and con's of each
solution, is there a better solution? Can Microsoft Terminal Services
handle a 100 + users? I have read about the Microsoft Session Manager
but never used it in a production environment.

Any feedback / suggestions greatly appreciated.