Customization : Site Template or Site Definition?

You can choose site template or site definition for customization based on the complexity. If you have small changes, just change the look of few pages then you can go for site template.
If you have to create new content types, web parts definition and major change in site structure then you should create a site definition.

Advantages of Site Definition
- Files are stored in Web server, So performance will improve.
- We can do complex changes by editing schema.xml file
- Certain type of changes require site definition for introducing new file types,
defining view styles or modifying the Edit menu

Disadvantages of Site Definition
- more effor is required to customize site definition
- Editing Site Definition after deploying is difficult.
- Cannot apply theme through Site Definition
- User cannot create two lists of the same type.

Advantages of Site Template
- Easy to create and deploy
- Can make changes to site template, will not affect existing site

Disadvantages of Site Template
- Not suitable for large scale websites
- If there is no Base Site Definition for the Site Template, site template will not work.