All other things (like price and storage space) being equal, given a choice in a perfect world, would you rather have paperbacks in your library? Or hardcovers? And why?
For most purposes I prefer paperbacks, they are usually lighter and more portable, which is important to me. I have huge affection for the old Penguin and Pelican covers, orange, green or blue and cream, and would be happy to have rows and rows on my bookshelf, even if some of them were battered. For preference I buy paperbacks, waiting, if I can bear, for new books to come out in that format, but there's plenty of evidence on my shelves of the occasions when I couldn't wait, or when a special bookclub edition was, inconveniently, produced in hardback. Or, in the case of old books, that is simply what I found.
The main exception is when I am buying an old, collectible, book – in that case I may well choose a hardback, especially if it's an affordable first edition, or is illustrated by a particular artist, or possibly just has a cover I like. With new books that might become collectibles, I don't have strong feelings – a well-produced soft cover is as acceptable to me as the alternative, though I do enjoy the occasional beautifully produced coffee table book. Another occasion on which I buy hardbacks is at readings, generally because that's what is on offer. Finally, I also buy old leatherbound books from time to time, when they serendipitously combine beauty and a subject which interests me.