Of course Panther is better, but it also eats more RAM. Run Panther if you have a decent amount of RAM (384MB and up) and Jaguar if you have around 128MB.
I noticed this because Jaguar would stay very snappy all the time under 128MB RAM on my 400mhz iMac. Panther is a whole nother story - I'm running it now, and it gets pretty sluggish sometimes. And to those reinstall freaks out there, this has remained true for several fresh installations.