I voted live axle on this one.
The live axle design we have used the last 2 years is very simple, low cost, requires little machining resource, and has been maintenence free (not a single failure through 6 competitions last year and 2 so far this year)
I think in reality the real answer is whatever you can do best is what is best. From reading the various benefits of each system in this thread, both can be great for you if done properly. I can also attest that either can be a nightmare if done improperly or if problems arise.
Some reasons that our decision to use live axles is easy are cost and machining. We do not have the machining resources to make good wheels for dead axles, and cannot afford the off the shelf products offered by some vendors. Our wheels, bearings, shafts and sprockets were under $175 for a six wheel drive setup.
So analyze your budget and machining processes and go with whatever you can do best. (good design helps alot as well

)
Edit** Here is a link to a picture of how our live axle is set up. There is one long key going through the wheel and sprockets for each shaft.
http://www.joemenassa.com/Images/ROB.../IMG_2877.html
Rob