CO2 inside here. beverage-air bm-23 kegerator has a nice shelf inside to hold a 5lb tank. the shelf can actually hold 3 5lb tanks, and still has room for 4 corney's. i like the inside gas cause it keeps it nice and neat on the outside.
I agree with firebrewer 100%. I just lost the use of my brewing facilities due to no a/c. This sounds like a bad thing, but it has prompted me to build a controlled fermentation cabinet on top of my chest freezer.
Just my two cents- If your faced with one or the other and you can ferment at about the right temp (68-72*F in most houses with a/c) with your equipment then I would deffinitely go with kegging first, if you can't like me right now then I would go with controlling first. If you can do both then I would suggest it for the same reasons firebrewer said about flavor control. Kegging is so easy compared to bottling that I believe everyone should make the move. I had to go to kegs (I went from 5-15.5 gallon batches), something about having to clean 165 bottles for a 15.5 gallon batch just didn't seem logical-or fun . Also, I use a spunding valve which alows me to naturally carbonate in my keg. I love this thing and got all my info to build it off of here and BYO magazine. Just something else to know about kegging.