I personally use showflat, if only because it's so much faster. If I want to know exactly which is a reply to which (if I can't figure it out, which I almost always can), I just tap that threaded button at the top, and click through the posts till I find the one I want. (At least w/o the numbered posts now...with those, it's a quick visual search for the original.)
Flat is for power-users. Fast, to the point, and if you want to know what it was in response to, do it yerself. <img border="0" title="" alt="[Smile]" src="images/icons/smile.gif" />
Threaded is for organizers. It takes more time, but makes more sense to them in the end.