I use a combination of the two. I prefer playing with a gamepad, but it isn't great for selecting actions, so I use it to run around and deal with the camera, while I use the keyboard for actions. I move action bars with the gamepad and also, since I'm a Bard, use light shot by just pressing a button on the gamepad. When I've healed in parties before I use the mouse to select people from the party list since it's quicker than using the gamepad.