I've worked with both. At first I liked my film much better but lately the technology for the digital cameras is just making them better and better. Even the cheaper ones like my Olympus Tough (I bought it for shooting the kids in the pool, bathing the horse etc) gives you pretty decent quality as long as you remember to keep your expectations within the camera's limits.
I'd have to go with digital, as I -love- my Canon Rebel XS, mainly because the features are so much more handy. You still get almost exactly the same quality as the film equivalent, but you can review photos and store tons more without having to worry about buying film.
Film does have it's positives though; wish I had a film camera to mess around with now and then, I've heard a lot of photographers say that you just can't get certain styles with a digital that you can with film.
I prefer film just because I do love to process the photos myself. I find that the picture quality is a lot better than that of a digital camera, given the picture itself was a sharp, non-blurry image.
Film, no contest. Yeah with digital you can take more pictures and do all these things, but I love the process of developing the film and printing the pictures. Sitting on my computer, editing pictures, I get bored. I could spend an entire day in the darkroom and love every minute of it.