Master Pages vs. Themes: Which Do You Choose?

A great article by Heather Solomon (the Sharepoint diva of branding :)) about the differences between a theme and master pages. The key differences are :

So, to run down some key points:

Master Pages

• Can totally change the look of a site.
• Can hide SharePoint components that you don't want to use.
• Will allow you to alter the layout of the page, in addition to changing the colors and images used in the site.
• Will not affect _layouts pages.  You will need to use a workaround.

Themes

• Can re-skin the layout of a site to use different images and colors.
• Can only hide SharePoint components that can be controlled through hiding it in the CSS (display: none set on a class/ID).
• Affects _layouts pages.
• Can be used as an alternate CSS file application method, similar to alternate CSS setting in MOSS sites.
• Are installed on the web server unless you customize the file.