Which is best to do? I mean is there really any difference when it comes to how smooth the ROM will actually run?
The only conceivable difference is that when you use nandroid, it will ERASE and re-create your entire system. the update.zip will only replace the files included in the rom.
If you have done a lot of hacking already, your existing changes will remain if you do an update.zip install. This could leave you with duplicate copies of applications or extra files that are not used. This could possibly mean some instability as well, but it is unlikely.
If you have only been installing ROMs, update.zip is probably perfectly fine, and won't mess with your data. Even if you have been changing things, try update.zip anyway, and only go to the nandroid if you are having issues.
Cool CM Tricks
custom_backup_list.txt - make a list of files in /system that will survive a nightly install (ringtones, notifications, system apps, wallpapers, whatever)
in Terminal Emulator, set this as your shell command: "/system/xbin/su -c /system/xbin/bash". You get all the features of bash, root access, and you can still use the initial command field for whatever you want (default is adding /data/local/bin to your path)
I've changed roms frequently and have only used the nandroid method one time and that was due to trying a 2.1 rom. All my other roms were 2.01 based. Update is quick and easy.
Baton Rouge, LA
The best to do? Follow the directions that come with the rom!
SG4.5 told me to do nandroid. I did and it worked great with no issues.
SG5.0 told me to do Rom from disk. I did and it worked great with no issues.
If you apply a rom or theme - backup first!
If you don't know how to backup...Stop until you do.
hint: I name my backups like this: sg6.0_20100428 or ss4.2_20100626 to easily find them later. rom and date.
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