Server-side targeting - Easy for small numbers of clients, doesn't require that clients can process group policy (i.e. aren't domain members, typically). Administratively burdensome for large numbers of clients or for clients that change roles and need to have their client group membership dynamically updated. For non-domain-joined clients this is the easiest way to get them into client groups.
Client-side targeting - Requires that clients either be able to process Group Policy (i.e. a member of a domain) or have the settings set in their Local Group Policy or registry (and why you'd do either of those last two things is quite beyond me, as well). Works well if you plan on having client group membership change based on moving the AD object that represents the client between OUs (move from "Staging" to "Production" OUs for new system deployments and want client group membership to change automatically).
I use both at different Customer sites. I find server-side targeting more flexible insofar as making "quick changes" (because I don't have to mess w/ Group Policy and I can see the results of my changes reflected immediately), but client-side handier when I need to the client group membership to reflect some "role" that's implied by the client's location in AD.