To be totally "outside the box", I suppose one could avoid non-linear loads in AC-DC conversion by using something similar to a rotary phase converter-an AC motor driving a DC generator. Though I imagine efficiency would take a pretty good hit.
On the larger wire for 12 VDC thought. Obviously it takes 10 times the current at 12 VDC to convey the same energy as 120 VAC rms. Right now, LEDs are averaging roughly 1/7th of the energy for the same lumens as incandescent lamps or metal halides (a rough approximation from recommendations I am getting on application). So a fully loaded circuit might take a little larger wire to run LEDs on the lower voltage vs incandescents on the higher voltage.
I was told yesterday by my supplier that current LEDs are running about 100 lumens/watt. A major manufacturer has a prototype ready to field test that is doing 200 lumens/watt and another in the lab that is showing 303 lumens/watt. Supposedly the theory said 300 lumens/watt was the limit. If there is substance to this information, then we still have a ways to go before the potential for LED technology is reached. So the question becomes-invest now or wait 6 months?