This is a controversial question with strong opinions on both sides. I won’t say which is “better” because I think that comes down to personal preferences, but I will point out some advantages of each.
For sheer bulk, I don’t think you can beat cloth, especially when piled up in several layers and properly folded. Nothing causes that classic baby waddle like multiple layers of cloth diapers. Also, when properly covered by plastic panties, cloth diapers will sometimes hold more liquid for their weight than disposables. (I say sometimes because many factors come into play.) That said, plastic panties are also a necessity because cloth diapers have a higher tendency to leak, particularly around the legs, as they lack the elastic gathers of disposables. Long-term, cloth diapers have a cost advantage over disposables because of their re-use. And cloth diapers have a nostalgic edge for those who consider them to be the “classic” baby diaper.
Disposable diapers, on the other hand, are generally easier to put on, and easier to get rid of (“disposable” after all!) Clean-up from messy diapers is easier (which is why liners are sometimes used for cloth diapers.) And disposables come in so many cute designs, literally a design to suit any baby. They are also easier to size and have a better fit than cloth, which helps reduce some leaks. As the science of diapers improves, disposables are also pushing the boundaries of absorption and wicking (dispersing wetness throughout the diaper.) And for those who grew up with Pampers, disposables may have a nostalgic pull over cloth.
There you have it – some advantages of each. Like I said, in the end it comes down to personal preference. But either way, you can’t go wrong, so long as you stay in your diapers and use them as you are supposed to!