That really depends on how much space you have for the DriverPacks to take up.
Method one will extract all the files and use the CAB compression, while method two relies on the much better 7-ZIP compression.
If you're going to create a DVD anyway, you can savely use method one.
Although, there seem to be some bugs with this, so it's saver to use method 2 ATM.
If you only create a CD (say, the PCs you want to use it on don't have a DVD drive), there's no way around method 2.
I've always been using it and I don't see any reason for me why I should go method one.
I assume installation would work faster on slower systems with method one, but usually, speed is not my main concern, as it never takes more than an hour to fully finish installation (and I use lots of add-on packs!).