I want to install Ubuntu on my Windows machine and was wondering whether I should use the WUBI method or rather install via a virtual machine using VMWare or Virtual Box.
What would the advantages be of either or disadvantages?
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If you have a recent processor providing virtualization capabilities (VT) and sufficient RAM, the performance difference can be insignificant.
Unless you need real HW access I strongly suggest using a VM.
WUBI would run faster because it is not running on top of a virtual machine. Also, with WUBI it would be easier for Ubuntu to access things like webcam, microphone, etc. The advantage of the virtual machine is that you can run Windows and Ubuntu at the exact same time and drag things from one OS to the other. Also, with a VM you can move the image to other machines. It all depends on what you want to do.
Technically WUBI installs a disk image within your existing windows installation. In you can boot into this disk image as if you had installed Ubuntu on its own partition.
Essentially, you can think of this like the Live CD transferred to the HDD. Running Ubuntu through WUBI does incur a slight performance loss, but it can be managed through windows' normal add/remove programs process.
The problems with this approach are that you cannot access the Windows file system (due to windows' file permissions system) and also there is a slight reduction in performance.
Using a VM is technically safer, you can do whatever you like to your VM with negligible chance of it affecting your windows install. There is a significant performance reduction however, as you are having to run an entire windows installation, and your VM instance simultaneously. Unless you have resources to spare, one or the other can be compromised by this setup.