Note that much of the energy spent for orbital flight is not spend getting height, but spent getting speed. Efficiency is greatly increased if you can reach high speeds without having to carry the reaction mass to reach those speeds.
LEO requires about 7.8 km/s, Skylon's jet engines can go around 1.7 km/s. You are reaching 20% of your orbital velocity without reaction mass.
http://en.wikipedia.org/wiki/SABRE_(rocket_engine)#Advantage...
The big savings, like spacex's grasshopper project, is of course a reusable space vehicle. The advantage to spacex's approach is that Skylon is a single stage to orbit space plane (you don't need to land a bunch of stages using retro-rockets).
If I was placing a bet, I would bet on spacex since they have a proven track record (rockets are easy, organizing/funding rocket companies is hard). Skylon is a great idea though and it is the general direction that aircraft engine design is headed (a peak at the future).
Unfortunately, kinetic energy scales as speed squared, so 20% of your orbital speed represents less than 5% of your orbital kinetic energy. To put this in perspective, the difference in gravitational potential energy between LEO and the earth's surface represents about 15% of your total on-orbit energy.
Now, it's true that an air-breathing engine doesn't need to carry reaction mass (and, sometimes, oxidizer), but the air engines add considerable complexity (which is always a bad thing) as well as weight (because you still need to carry a conventional rocket to finish orbit insertion). So what you need to do is ask how the weight penalty of the air engine compares to the weight penalty of carrying extra fuel in a conventional rocket (bearing in mind, of course, that there a pernicious positive feedback loops when scaling a booster).
Fortunately this is counterbalanced by the Oberth effect. Getting to 20% of your orbital velocity requires expending 20% of your rocket's delta-V. And since delta-V is logarithmic in your propellant mass (rocket equation) that could easily translate to needing half as much fuel.
