I use both. The computer is great for the reasons Sardy gave - I type way faster than I write.
That said, there's something organic about handwriting. I started out that way when I was just a kid, and have notebooks full of crap I wrote all through college. So sometimes when I get stuck staring at the computer with no words coming, I'll get out a blank book and go back to handwriting. I like to carry one around with me, too, in case I want to jot down some ideas while I'm out and about. There's something very satisfying about curling up in one of the big cozy chairs at Starbuck's and outlining a story while sipping a latte.