If the modulator holds vacuum, then replacing the o-ring itself will correct the fluid leak. It is rather cheap to replace the rubber vacuum lines, so I'd agree with that. If you are doing this yourself, buy more than one o-ring from the dealer. It is rather tricky to install and you are likely to cut a few o-rings before installing it right.

I'd only repalce the whole modulator (which the new one are more easily adjustable) if you have poor shift modulation.

ATLD.