The routed setup i'm suggesting is simply substituting your ProCurve switch for your Cisco router (taking over both of its IP addresses), and substituting a single (untagged) VLAN for your serial link. Just think of that VLAN as a point-to-point connection (which contains only two untagged ports and nothing else), and you'll visualise it more easily.
The disadvantage of using tagging and doing routing at your central site is that broadcasts and non-IP traffic can (and do) cross the WAN link. You can reduce this by doing broadcast limits on each VLAN, but this affects all ports on the VLAN, not just the WAN link.
Using a routed setup means that your network is more likely to scale effectively in the future. Usually it's good to keep no more than 200-500 machines or so in a subnet no matter how widely distributed the VLAN is. Let's say it gets to 600 PCs and you decide you want to split it into three - then you would need to trunk the 3 VLANs across the link (including their broadcasts).
If you stick with routing, no matter how many new sites you bring on, there's no broadcast going across your WAN.
What you lose by doing pure routing is the ability to put machines in multiple sites on the same VLAN & subnet. This is presumably not a requirement at present (given that you're using a routed link), but might be in future.
I've done it both ways, and each solution is better at some things and worse at others, but i generally lean more towards routing where it's possible.