Personally I prefer '-' to '/' every time. There is nothing more off-putting than webpages in sub-sub-sub-sub-directories of directories: joeblogs.com/interesting/lessinteresting/moderatelyinteresting/boring/mindnumbing - eeek
i am doing mod rewriting, to shorten my urls and just want to use the most search engine friendly version, I also profer -'s myself.