Either way works, and there is no difference in speed of the rip, so you need to determine if you need the ISO instead of the file structure.
The main reason to rip to an ISO is playing the movie on the computer with a software program like PowerDVD. Cyberpower (the maker of PowerDVD) disabled their player slightly, not allowing it to play blu ray video from file format. This was done because of pressure from the studios. Ripping to an ISO may also be beneficial if you are doing complete backups to double layer, 50gb blank disks.
In order to play blu ray from the hard drive with PowerDVD, you need to have it in ISO form and mount the ISO in a virtual drive. I recommend Slysoft's Virtual CloneDrive for this. You also need to mount the ISO in order to work with it in BD-Rebuilder.
Virtual CloneDrive is free to download and use. http://www.slysoft.com/en/virtual-clonedrive.html
I believe Arcsoft's TotalMedia Theater will play blu ray files as well as the mounted ISO files. But it is a fairly expensive program and isn't often bundled with blu ray drives the way PowerDVD is.