Physical Standby is typically DRP-oriented. Its main advantages are:
- List item
- easier to setup
- support every data type
- faster apply
In 11g, you can easily utilize it for testing (snapshot standby). Also, if you license Active Data Guard option, you can use it for near real time reporting (under some limitations - the standby is readonly, but some workarounds are available - see Apendix B in the best practices paper). Active Data Guard also allows you to perform fast incremental backups on the DR site instead of the primary
Logical Standby was typically used to enable reporting on a standby. Its main advantages are:
- Standby is open for reporting without extra license.
- you can add indexes / MV specific for the standby
- you can add your own app shemas and your own updatable tables in the standby
So, for pure DRP, use physical. If you need read only access, decide based on these features. For example, check data type support, see if you need the faster apply performance, see if you are willing to license Active Data Guard (and upgrade to 11g if you are not there) etc.