IMHO - If I don't use the car while traveling, but am towing the the car mainly so I'll have it at my destination, then dolly may be a better option.
If I like to use the car every night, at every stop, then flat tow would be the better option.
Advantage - Lower cost, almost any vehicle can be towed with no special additional equipment required. Having a dolly makes more towing options available. (Dad's automotive repair and broken vehicle towing)
Disadvantage - A little more time consuming to load / unload vehicle, its a pain in the butt compared to flat towing. (With that statement, watch the discussion pick up)
Advantage - quick and easy to load / unload
Disadvantage - Initial cost is substantially higher. Tow bar, base plate, brakes. Some of this special equipment is dedicated to vehicle and cannot be used on other vehicles - i.e. base plate.
I do both, flat tow and dolly tow. The decision is usually based on the question: "Do we plan on using the car while traveling?" If the answer is no, then we dolly and usually take our daily driver. If the answer is yes, then we flat tow and take our Saturn or Civic.
While traveling, we'll pull in for an overnight stop and might like to drive into town or something with the car. Usually with the dolly the answer is " I don't fell like unloading the car, maybe next time". With the 4 down, we just unhook and go.
Sometimes, if we think we need both cars, we'll tow one and drive the other..
2001 Coachmen Mirada (Ford F53 6.8L V10) - Toad 2003 Saturn Vue
It won't do MACH 2, but I can get a sandwich and take a pee.