[Cydia] Thumbs up! My experience
If you dont want to read a long story, the moral is if you know even the slightest bit of linux, go w/Cydia, if all you do is play garf, stay with installer.
A bit of background....
When I first got my phone It was 1.1.3 already unlocked from a friend. after installing all the stuff i wanted, SSH, ftp server, terminal, BSD etc... before i read about it, i changed password from a SSH session then uninstalled SSH (doh) so I had to reload.
I DFU my Phone to 1.1.4 through iTunes, Ziphoned it. As I read on these fourms and others there was alot of talk about Cydia, but alot of worrying comments like "apps 2 gen behind" and "more for programers" lead me away from it and to stick w/installer and BSD.
long story short I was fooling around with perl trying to make a hash to insert into the master.passwd file to change my passwords I got the password changed, but apparently it didnt work right cuz it wouldnt take my password when i typed it. phone ran fine. no SB crashes, but i was essentially locked out. I had my master.passwd file, but since i couldnt log in to ftp and the terminal.app uses mobile user and cant overwrite the master.passswd file I had to reload again. I figured wtf, I will give it a shot and loaded 1.1.4, ziphone then Cydia then fake bsd. first of all. Cydia is not 2gen behind in apps. in fact for linux tools its miles ahead. all of the packages i have installed from cydia work at current time. it seams like with installed you got a 60% chance it will work when you download it. 20% chance if you fuck with the files or mounts you can make it work or it just plain doesnt work. With firmware 2.0 looming this advice could become very stale very fast, but for now, if your reloading your phone and you know such commands as ls, chmod, chown, vi, cd, passwd you probably know enough to be taking advantage of what this package has over installer.