Mine sleeps. The Hibernate in XP had an issue that there was a patch/update for but some still have issues. The issue was that the machine would lock up when trying to come out of Hibernation. Anyone please correct me if I am wrong, but I do remember this issue.
And what sucks also is if you use an APC battery backup and it's Powerchute software it wants you to have the Hibernate turned on. :s O.K. too much info (too much caffeine )
Both have their advantages and disadvantages.
I personally prefer Hibernate, but like others have already mentioned, you sometimes have problems when powering up again.... i'd say maybe 1 in 100 times depending on how the system is set up.
I don't particularly like Sleep, purely because if you or anyone else accidentally hit a mouse button or even move it, the pc will power up.
Easy to fix by going into device manager > mice and other pointing devices > right-click on mouse and select properties > power management tab > uncheck box in front of allow this device to bring the computer out of standby.
standby (S3) all the way. it's so quick. as i sit down, i hit the spacebar and it's ready to go by the time i scoot the chair in.
i have all my pc's set up so the power button on the front puts them into standby. actually, one of the towers isn't easily accessible so i have a shortcut for standby on the desktop. i only actually shut down if i'll be gone for a few days.
and if something wants it to restart (windows updates, new driver), i wait until i'm done using it then shut down. so next time i turn it on, the restart is accomplished.