Is social media better for acquiring new fans and followers or is it better for updating & engaging with your current customers?

I've yet to see a social media program that developed customers, rather than followers. Not that followers aren't flattering, but its tough to make payroll on flattery.

I suspect there's greater value in inviting your existing customer base to keep in touch through social media than to expect people to become interested in buying what you offer simply because one of their friends clicked your "like" button.