I did a book as a long doc once. Never again. Assuming that you want all chapters to start on a recto, in the usual way, then using the book panel will save a boatload of production time if the document is still “live” when you're typesetting it (i.e., there will be edits, adds, deletions). Paragraph, Character and Object styles all sync across book documents, cross-references work fine, etc., and it's massively easier to switch out a single chapter, or rearrange the sequence of chapters, if you have a book vs. a single long document.
The only caveat is that synching master pages (in a Windows version of CS4 or CS5) is currently broken. No indication from Adobe of when that will be fixed. Attempting to sync across multiple files with Master Pages selected will crash ID if there are margin changes.
For ePub, cross-references that connect across documents don't currently work in CS5, but are fine for PDF output. I'm not sure about CS4.
Depending on your project, another possible gotcha is that odd bits like Footnote settings (Type > Document Footnote Options) and baseline grids (document grids, not text frame grids, which can be locked in an Object Style) have to be set chapter by chapter unless you work from a template file. These won't be an issue if you don't use or don't need to change them.