If you're doing a local recording and you want to keep your CPU open for your game or other applications, hardware is the way to go. You can crank up the bitrate high without a noticeable performance hit so your recordings can look very high quality. If you have a high bitrate for x264 your CPU usage will increase a lot.
However, when you can you should use software encoding for streaming since it has better quality than hardware encoders at equivalent bitrates, therefore allowing your upstream to use less bandwidth so other applications (like games) can use it.
Though this is just a rule of thumb, and not all hardware or setups are the same.Reply