Yes, Serato (along with most, if not all of the other computer dj'ing software) will give you the option of using control vinyls or control CDs.
You shouldn't have to worry about upgrading CD players. Each package comes with two control vinyls and two control CDs. :]
Here's a picture…
http://www.planetdj.com/images/SERATO-SCRATCH-LIVE.jpg
