It's funny. I _just_ got back from seeing a VC earlier today on Sandhill Road, and when I told them we were working on building out a product, they told me I shouldn't focus on that and should come back instead with a business plan. I'm fairly convinced that if I'd gone in with a business plan they would have told me to come back with a product.
Ultimately I think PG is correct. Focus on building out the business. If you spend all of your time planning instead of shipping, you're going to fail.
This sounds like the start of VC goose chase. They'll never say no but instead just keep you busy on the off chance that you'll hit on something. The only thing that snaps them out of it is the serious prospect of actually making a ton of money with managed risk.
I wouldn't waste a minute of time writing a business plan. If you want to throw together a 1-pager, or a quick "Business Plan" .ppt presentation, sure. Nothing beats product and traction. For the record, I've contacted thousands of VC's, spoken to hundreds, and closed none of them over the past 4 years. I have only once been asked for a business plan, and of the rest every one of them asked to see a demo.
Ultimately I think PG is correct. Focus on building out the business. If you spend all of your time planning instead of shipping, you're going to fail.