I bottle. I know a fellow homebrewer that kegs, and insists that I need to keg in order to improve the quality of my beer. I think he's delusional. I believe that there are benefits to bottling and benefits to kegging. But the only kegged beer that I've ever tried that was noticeably "better" than my bottled stuff was the cask conditioned ales I drank in London.
Yeah bottling is a lot of work, but its hard to give a keg as a gift. Its insane to lug a keg to a party where there's just a few people. With bottles, I can package my beer to go, and give a sixer or twelver as a gift.
I've been thinking of getting a mini-keg system so I can cask condition and keg partial batches of beer, but I'll never totally depart from bottling.