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What's the best group of upgrades for a Hammerhead with railgun?

I'm thinking Target lock and Multi-tracker for sure. Possibly a disruption pod so I can use the landing gear and not count as a skimmer. Oh, and a SMS.

multitracker and decoy launchers are the only must-have upgrades, I'd say. I can't imagine you're going to need to land your hammerheads, and disruption pod is not good enough if you were. Penetrating hits are bad, obscured target is not good enough.

Target lock and SMS are common, but not really necessary. Often they come in handy, but they're not game winners in my opinion (though massed SMS fire can be real annoying for your opponents). You may be able to find someplace else to spend those 15 points per hammerhead in your army that works better for you.

Multi-tracker is absolutely essential to get skimmer moving fast, decoy launchers nearly so (what's not to like about reducing your chance of a glance killing you from 1/3 to 2/9? (note how this absolutely sucks compared to holo-field)).
Disruption pod is good for those times when you get stunned. Don't forget, decoy launcher only allows you to reroll immobilization results.
If you're in a force without many markerlights and play night fights often, blacksun filter is good
If you get regularly charged by infantry with bad armour saves, flechette (sp?) launchers are good

Target lock is nice if you're loading up with a smart missile system, but can be skipped if you need the points

I've never used sensor spines myself, but I can see _in theory_ how they might be useful, if you're playing on a table with lots of terrain against a SAFH, but I don't really see it as being worth the points.

And that's my $0.02 (CDN) on tau vehicle upgrades.

I run, Multi-Tracker, Target Lock, SMS, Decoy Lanuchers. It clocks in at 180 points. I get the ability to run a full 12", I get the ability to split my fire between two targets, even if the Hammerhead can't see one of them.

The thing about the SMS system is that under no circumstances is the burst cannons going to be any good against what ever the solid shot railgun is aiming at. Because of the SMS system, we can now shoot any infantry unit within 24", no matter where they are. Also in the event of a weapon destroyed most opponents will take out the railgun. With an SMS system the Hammerhead can still hide to protect itself and still be a threat. Its just a win/win situation.

I use them like Jayden does.

The SMS are anti-infantry, the Railgun is either clumped anti-infantry or anti-tank.

I use the SMS to pick off lone lascannon guys after the rest of the army has blown the rest of their squad away--and do my best to kill a tank with the railgun while I'm at it.

As a highlight, I usually run a Piranha in front of my Hammerheads so ground based troops that try to fire at my Hammerhead have to test to not shoot the Piranha. Works pretty good, as when they fail it makes it very difficult to see the Hammerhead (assuming the Piranha blows up, which usually happens as anything aimed as a threat to a Hammerhead chops the Piranha a new one.)

First you should think of army sinergy and whay you want each of your units to do. some upgrades may not be neccisary given the makeup of the rest of your army.

I run mech tau and my armies effectiveness is my tanks(both hammerheads and devilfish). as such i tool each of them up with almost everything except sensor spines and black sun filter to keep them effective.

Alot of whats been said is good advice but i will run through them for you-
.targeting array-get it for free on a hammerhead, hit on 3+ yeahness
.target lock-as stated above-spliting fire is grand, not many other armies or units in 40K can do it. railhead kills tanks or big groups of infantry from very far away, with a target lock you can fire your other weapon system at something you can hurt and that is closer.
.multi-tracker-its a skimmer, does this really need explainging? you always want to be moving over 6" and still be able to fire.
.decoy launchers-very useful at keeping your tank alive-only glancing 6's can kill you, as the glance 5 usually re-rolls something less deadly given the odds.
.disruption pods-useful but not mandatory. they really come into thier own if you have an exposed tank and don't get first turn to start moving, or you take a glance 3 result and are going to be under fire next turn from a unit far away(over 12")
.fletchette launchers-mandatory in my book. it is the single best CC abilty the tau(and possibly the best in the game) have. your tanks will get assaulted eventually so prepare for it. you should see wha it does to infantry based CC armies.
.seeker missles-optional and only really useful for other units in your army or to prive additonal safety against multple weapon destroyed results on the glance tables.
.smart missle system-mandatory-again a no brainer-2 less shots than the burst cannons but with longer range and no LOS or night fight restrictions.

The useless-
black sun filter-seriously how many people play nightfight games? and actually roll a 1 or 6? even then its only 1 turn of the game. unless you play lots of all night fight missions it isn't worth the points(which is generally never).

Sensor spines-its a skimmer, you should always be moving, why on earth would you
A.not be moving over 6" to benefit from the SMF rule
B.want to take a dangerous terrain check
C.be forced to make a hull down roll when you get it for free from the SMF rule.

Once the game starts skimmers should never ever stop moving unless they are dead or are stunned (and immobilised with eldar vectored engine things) and have no way to reduce the stun to shaken,