My preference is to use whole hops with a false bottom. It is an order of magnitude easier to use than dealing with pellet sludge. That being said, whole hops and really hoppy beer translates to significant wort loss. Luckily, my preference is for non-really hoppy beer. What made me switch to pellets was Mark Garetz getting out the business. I prefer to purchase hops as close to grower as possible and Hops Direct only sold whole hops by the pound, which is too much of one variety for my use (Mark used to sell whole hops by the half pound). Plus, shipping is cheaper for pellets. I know that people are going to think that I am crazy, but the bitterness from whole hops comes across as rounder/smoother than it does with pellets. Plus, something is lost oil-wise during pelletization. Not only can I tell, but my friends asked me what changed when I switched over to using pellets. If using a counterflow chiller was not such a pain in the backside compared to using an immersion chiller, I would go with the process used by the Peter Austin and Partners system breweries; namely, pellets in the kettle followed whole cones in a hop percolator (hopback).