Should I buy the EB-16 or the 8-out expansion first?
I would go for EB before the 8-outs on a limited budget:
1) you get 4 busses of effects. 2 multi-effects and 2 reverbs. Try buying 4 outboard effects processors and supporting equipment for less than $350.
2) EB-16 Settings are stored with programs. No need to configure another midi device to properly switch programs/settings at the same time you switch sounds.
3) True multi-effects. For each of the multi-efx you can use all available effects at once. That is, you can use MOD, DIST, REV, DELAY, etc. at one time. Any other budget processor only gives you 1 or 2 effects at once.
4) Do not need extra suppoting gear like audio cables, midi cables, cases and additional channels on mixer. Less pieces of gear to carry around if you are gigging.
Of course some of the effects are not going to of the highest quality and I would not ever attempt to put a <$1k reverb on a lead anyway.
As far as a cost standpoint, it takes a lot of other gear to support the use of the 8-outs (external processors, mixer channels, cables, all cost more money if you do not have already), but you get immediate full use of the EB16 without requiring additional hardware. The MPC already has a 'mini' mixer in there complete with 'aux sends', levels, pans, etc.
The MPC literally has 4 stereo aux sends for every pad. You can send any number of the 64 samples to one these aux sends which go to the 4 FX processors. Though the MPC only has 2 stereo returns. The R1 shares the output assignment of M1 (and R2 gets routed to the M2 output). Think of the EB-16 as an effects processor with 4 stereo inputs and 2 stereo outputs.
Compare that to the 1604vlz which has 6 mono sends for each channel and 4 stereo returns. 3 of the 4 are hardwired to the mains out and one is assignable to sub1/2 or 3/4. At least in the MPC you can assign the efx to any set of outputs.