Hi
my rudimentary understanding is that the Queries are precompiled - unlike embeded sql, and that therefore there will be at least a slight drop in performance.
Personally, I prefer to use sql as the source, but acknowledge that data mtce can become a bigger issue (although there are ways to limit this), and it does create problems when using similar datasets for report outputs (to make sure the numbers match across reports you want a common source). The advantage is I know where the sql is, that if I change it there it doesn't have side effects to other datasets, and that I don't have to come up with another variant query name.
Cheers
S