Search Engine Optimization

Advantages:

Long-term benefits: improved search engine rankings and increased traffic can last for many months or even years. Clients often are rewarded with a higher return on investment (ROI) than with Pay Per Click campaigns.
Not subject to fraudulent clicking.

Disadvantages:

Results can take weeks or months to obtain.
No guarantee of rankings.
Larger up-front cost than Pay Per Click.

Pay Per Click

Advantages:

Immediate traffic increase possible.
Rankings can be controlled by bidding higher than your competitors.
No large up-front cost.

Disadvantages:

Listings and rankings only last as long as the funds in your account.
"Bidding wars" with your competitors over popular search terms.
Overall market trend towards a higher cost per click.
Possibility of fraudulent clicking which can rob you of your ad dollars.
Search Engine Optimization and Pay Per Click campaigns can be done in conjunction; each has it's own distinct advantages.