As far as putting all your money in the house, I think you should contact a financial planner. Almost everything I have heard suggests you should diversify your investments. Don't put $200,000 in a house if it can go down by 20%. And as a previous poster stated, if you put 20% down and it goes up 20%, you doubled your investment.
If you have any debts whatsoever, those will definitely be better than paying on a house, since a debt will probably be at 8% or higher, which cost you more than a mortgage.
If you have the cash assets to pay cash for a home, you will then have that 80% of the value of the property to invest elsewhere.
You should also appreciate the fact that you have to live somewhere. You can either rent, buy or throw your bed roll out under a highway underpass. Renting will likely cost you more, and you will have nothing to show for it but shelter over the next 30 years. Buying leaves you with a valuable asset at the end of the 30 years. Thus, it's not unreasonable to say that you should not consider the payments as a cost of the investment.
If you can put 20% down then you do no have to pay PMI. You home is one of the few right offs that the government stlill gives you so my advice would be to be to put the 20% down and make payments and get the tax benefit. You should consult a tax accountant for further information.