Hi talexb...

As you said those solutions have advantages and disadvantages... You won't find the 'one and only' right way to do it... I use both of them becouse my key variable is frequency of changes in a database. If it's a news board or something like this, then it's generated live. If I can add a new data for an update daily, then it's static and linking directly to the URLs doesn't make any sense (URL is still valid, but the content is different).
If you don't know which one to choose then try making it live, becouse then (if it's done well) you can 'generate' static HTML without real generator (using wget or something lik this).
Choosing 'live' solution you won't get into the dark alley... besides (with the power of Perl) it's only a few keystrokes to make it statically generated using cron... Good luck!

Greetz, Tom.