If you are just using it as an archive, it doesn't matter that much. If you are going to burn back to a disc at some point, then I'd go with the ISO file that saves the entire structure of the original disc. But again, I must emphasize, it doesn't make a great deal of difference.
If you are going to play from the hard drive, make sure to use something that recognizes ISO files, or be able to mount them before using a software player (Windows 8 and 10 can mount them natively).
That said, most of the movies I have on the hard drive are in folder format. Very few DVD's anymore, but lots of Blu-ray. I play them with Media Player Classic Home Cinema most of the time and bypass the menus.