Yes the 877 support VPN.
I personally prefer the router over the PIX because they are more feature rich, easy to configure and to troubleshoot. Other people is adamant bout the PIX being superior because it is conceived for security.
Whatever the choice, make sure you have someone that can configure and maintain the network properly, not just applying a template and then unamble to adapt your needs.
Hope this helps, please rate post if it does!