The VU meter is almost almost 65 years old and, like anything that age, probably has limited years left in its existence. It's a shame, we'll miss the old friend.

This audio level indicator was developed by two industry giants (of the time), Bell Telephone Labs and the Columbia Broadcasting Company (CBS).  It is a very precise instrument.  There are specifications on how fast the needle responds to a peak, as well as the amount of "overshoot" or "undershoot" it can have in quickly reaching the correct indication.  According to Howard W. Tremaine*, "VU Meters are designed to have a dynamic characteristic [needle response] that approximates the human ear."  This is why many audio professionals like to use the VU meter.  A "Peak indicating meter (like most of the led meters of today) tells you when you are overloading digital recording equipment, but the VU meter tells you how loud it sounds to the ear.

Before there were VU meters, recording and broadcast engineers used volume indicators that were non-standard in their ballistics (needle response) and did a poor job of giving suitable measurements of the complex waveforms of audio.  These meters, called VI meters, were based on meters that measured steady ac voltages for test purposes.  A VI meter and VU meter would read the same on steady tones but the VI meter would read as much as 35% higher on sudden peaks of complex audio.  The VU meter reads the "average" level of the waveform on steady tones but reads between the average and peak levels on complex waveforms - just like the ear hears.

 The VU Meter is distinctly American, developed by American companies.  Broadcast engineers worldwide immediately embraced the new meter when it became available in late 1939, but recording engineers were a different story.  American recording engineers loved the VU meters but European engineers preferred using peak-indicating meters that did a better job of signaling possible overload. 

The meters that you find on small-format recording equipment of today are led meters with "segments" that light green, yellow and red as the level increases.  Most of these meters read the peak level to prevent overload, but some of the best have a "VU" or "Average" response mode.  None of these meters do the same job that an old style VU meter does with its moving needle.  With the needle, you can easily see a quarter dB change, that the led meter would almost always ignore.  With the bouncing VU needle you can actually ride the level and bring down sudden changes in level during recording or mixing - you can do this by judging how fast the needle is moving. This kind of indication is not seen on an led meter even if it is responding to the "average" level.  

On large-format studio consoles, you usually have a choice of ordering it with VU or led meters. Many of the best recording engineers insist on the VU meter option.  As the recording world gets more and more digital, even large console manufacturers will soon stop offering the VU meters and recording will suffer a bit.

* Reference:  The Audio Cylopedia, Howard W. Tremaine, Howard W. Sams Co., Second Edition (1978 Printing), page 447.