First off, welcome to PSG. Yes, that topic is very frequently covered. Which is good for you since there are countless answers to the questions and tutorials on the subject.
There is no one right answer. As you said the pen tool is great for smooth lines and the channel method is better for troublesome areas like hair. I wouldn't use channels for a smooth line and I wouldn't use the pen tool for hair... so it's not a matter of best... it's a matter of best given the circumstances. Often you use more than one method for an extraction to get it just right.
That said, here are a couple of tutorials on the channels method, which is a very powerful method of extracting images with difficult edges.
http://thegoldenmean.com/technique/replace_bg.html http://www.weichertcreative.com/tutorials/extract.php
Good luck, extractions are a complex subject, but once you master them you'll impress people at parties and woo the opposite sex... well... you'll be better at Photoshop at least.
Realistic cut outs 
Linear Mode
