Dorm all the way. In my opinion, everyone should have to live away from home for some time, and should have a roommate at some point (shocking I know). I hated my roommate for the first few months of my freshmen year... but it's where I learned to make compromises, work with a peer, stand up for myself, and become humble to others. You learn not to take yourself so seriously, and you get the chance to learn a lot from those on your hall.
Sure, dorms can be noisy... people can get annoying... but it's one of those great life experiences. It makes for stories. Plus, more often than not, you can make really great friends.
In my experience, those who commute (i.e. live at home) miss out on some of the college experience... which can be defined in so many ways. They aren't there at night walking to and from the library or dining commons, they aren't hanging out at nights or on the weekends, they are just seen going to and from class -- but to each their own.
I am about to graduate this spring, and my college has become my "home." Sure it's frustrating sometimes, but my friends have developed into a close family that I wouldn't trade for anything. Oh, and I have had roommate(s) for 3 of the 4 years I've been at school.