The oAuth button is decidedly and absolutely better for a simple reason - it is documented and relatively stable.
The Login Button has nearly no documentation right now ( https://developers.facebook.com/docs/reference/plugins/login/ ), and the behavior has slightly changed several times.
The documentation for the login button is currently limited to how you can :
- change the appearance [ width, show faces , rows ]
- specify scope
- specify a registration-url
For the last several months ( ~Jan - July 2012 ), the documentation has not included anything concerning the flow of information or status -- ie, what actually happens on a successful or failed login.
While there are answers to these questions on StackOverflow , and mentions of other parameters that seem to work when passed in, Facebook does not mention or document any of this functionality at all, so it is essentially use at your own risk. The LoginButton is essentially a black box of mystery, that people just seem to have working thanks to undocumented features, and with functionality that will change/cease on random weekly updates.
tl;dr - stay the f(*& away from the Login Button and just use oAuth