Answer:
Both have their pros and cons.
Punkbuster is known for having alot of issues. It also is a separate program. When it detects a cheat, you are banned right away.
Now VAC...
VAC may have issues once in a while, but nothing compared to Punkbuster. VAC is also a server-side program, which means it isn't a separate program. The biggest difference is how bannings work: VAC uses a delayed ban system. This way, when you cheat, you may not be banned for months. This IS intentional, as cheaters/hackers will not know which cheat set-off the "alarms". Also, it tricks people into thinking something is "VAC-proof" as they wouldn't know if it has been caught or not yet.
One last VAC note - If you are VAC Banned, this is glued to your Steam Account, and you are only banned for that game. This just blocks access to "VAC-enabled servers" (so Single Player games won't be effected). To gain access again, you have to rebuy the game on a DIFFERENT account. (If you rebuy and put on the same account... you will still be blocked).