I've always favored avoidance over HP. My paladin is currently sitting at 27.2k HP with 105% avoidance + block. I've got one more upgrade in my sights from Naxx (neck) and possibly a new belt, and then I'm going to start tweaking my gems and enchants. Unfortunately, it's hard to reduce only my block % without also reducing my dodge, parry, and chance to be missed at this point.
One of the first things that came to mind when reading about the mana regen nerfs slated for 3.1 is that it will probably be a lot more important to avoid incoming damage altogether than it will be to simply be able to soak more of it. If I'm enchanting/gemming for stamina vs. avoidance, I'm basically just creating that much more for healers to top up. Personally, I'd rather dodge/parry a hit for 3k damage than have an extra 3k HP to soak it. It's not as critical for current content, and a higher health pool is definitely an asset for fights involving a lot of magic damage. I'm a bit reluctant to do a lot of costly tweaking now given that I'm performing well in existing content and there's no concrete information available about Ulduar yet. Once I see some finalized information, I'll definitely be giving my gear a much closer look.