Physical, I like having a copy that I will own forever no matter what. Granted digital copies don't seem to be going away anytime soon, but say suddenly steam closes its doors, you'd most likely have no way to get that digital copy again should something happen. I personally am not a huge fan of that. Also having a physical copy is nice when you have to reinstall things for whatever reason. For example, this summer I have to install Windows 7 and my PC won't let me straight upgrade from XP, I am going to have to re download half my library off of steam, its probably going to be upwards of 100+gigs. That is unfortunately going to take a while...whereas I could pop that physical copy in and just install.
Also I don't get why digital copies aren't slightly cheaper than hard copies. I don't get a box, I don't get a disk, nor do I get a manual so why am I paying the exact same price? Why don't they at least knock off $5.