First of all, forget about one method being "better" than another. Better is what gets you good beer, and any one of those methods will do that.
For "extract with steeping grains", you are just using hot water to get some color and flavor out of the grains. All the fermentables are provided by the extract.
To get fermentable sugars out of the grains, you must steep (mash) them at a controlled temperature - roughly 150 to 154 degrees F. - for about an hour. If you use enough grains, you can get enough sugar so that you don't need any extract. If you use extract to boost the sugar content, it's a "partial mash".
Like I said, any method will work. For me, the limiting factor is how much gear I can fit in my kitchen.
No worries!
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"Anything worth doing, is worth doing slowly." ~~ Mae West
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