Not a big fan of siding, but I must admit, I envisioned the old vinyl siding from the 60's, yuk! However, after reading your question I googled house siding and found this websit you might check out for ideas. Very impressive and would surely fit in with the style of your home. You might also google images of stucco colonial homes.

http://www.certainteed.com/products/siding?
utm_source=Personal&utm_medium=Siding_Vinyl&utm_content=Aspot&utm_campaign=General

We have worked on many homes with various exteriors including both stucco and siding. My choice between the two would definitely be stucco. I agree with your builder, stucco is classier. BUT! We are seeing more and more homes with two or sometimes three different materials so if you can't decide, why not both? Do you have an elevation you could share?

Here is the Front Elevation of my home. I do really like the look of the Certainteed ceder board polymer siding; I just can't find anyone around here that sells it or has even heard of it. @Mouldex Mouldings- I love your work. As you can see I am in need of some serious columns in the front of my home is this something you could make?

what climate do you live in? I personally think stucco looks out of place anywhere north of California. I like stucco but it does seem harder to keep it looking clean, although I live in the Portland, OR area so whenever I see it, it usually has algae growing on it...definitely not classy. I also feel like if you do stucco, an appropriate roofing material like clay tiles makes it look nicer, but I'm not so sure on a colonial style home. I guess for me it really depends on the climate.

I live in central Idaho. Stucco is very popular here; but you already know my opinion on that.

James Hardie has a cement board siding that looks like stucco, but also shingles and lap siding, and also with some additional features like battens; check them out http://www.jameshardie.com/homeowner/products-exterior.shtml