Playing an MMO with a controller

[Niwashi]

Controller is better for movement. Double joysticks beat anything a Keyboard/Mouse user has to work with in that regard.

Controller is marginally better for activating skills, with all of its controls being in easy reach at all times. KB/M users either have a limited section of their keyboard easily available one-handed, or else they have to forego the mouse in order to have both hands for the keyboard, but that then further limits their movement and targeting controls. (This is as compared to a standard keyboard and mouse. Specialty devices like the Razer Naga some have mentioned, a mouse that can be configured to effectively act as a controller at the same time, may be able to take care of this issue.)

Keyboard & Mouse is marginally better for targeting, since they have mouse-over options that controller players don't. (KB/M would probably be significantly better than Controller if compared to the default controller configuration, but most of the controller's awkwardness is taken care of by setting up multiple targeting filters. It still has the issue of targeting elements of a particular type in a strange seeming order, but the keyboard has that same issue, leaving the mouse as the tiebreaker.)

Keyboard and Mouse is better for things like setting waymarks or any action that gets placed at a spot on the ground rather than on your target.

All in all, I'd say it's pretty much a wash. Each has some slight advantages and some slight disadvantages, but either works well enough for even its worst feature once you're used to it.