LAN, hands-down. It's more social, the quality of play is higher, you don't have to worry nearly as much about latency and connectivity, and it's much easier to control entry (ie: filter out the jerks).
Online multiplayer is there to fill in the time between LANs... because the major advantage online has is convenience. Most of us can't just decide one evening to hold a LAN and get playing in ten minutes, sadly. (Maybe if you're in a dorm or something... but us wage-slaves don't have that option.)
-- Steve