This article is from the Fitness FAQ, by Jeff Gleixner (glex@cray.com) with numerous contributions by others.
There will always be an argument as to which one is better.
Free weights work more muscles, indirectly, for stability
and balance and they allow a free range of motion. Machines
isolate muscles better and are safer, since you can't drop
a bar on you or get pinned under a bar on your final rep, and
you don't need a spotter. Most people who train use both, or
whatever type is available. A lot can also be accomplished
by doing exercises with neither, such as, push-ups, pull-ups,
one-legged squats, lunges, etc. Each exercise or piece of
equipment hits the muscles at a slightly different angle.
Experiment to find what works for you. A good way to use
free weights and machines is by doing an exercise, using
the free weights, then go directly to a machine and work the
muscle further. This way the muscle can be worked to failure
with less risk of injury and you'll probably work the muscle
harder knowing that you're not going to get stuck under the bar.
 
Continue to: