Always, always with the tabs, never spaces.

The main reason is that on my widescreen monitor, indents of 4 characters or less are hard to visually parse in dense areas of code.

If the original author of this code (the actual code I am setting fire to myself over right now) had used tabs instead, then I could set my editor to display indents as 8 or 12 spaces instead, and he can still use 2 spaces if he wants. This is strictly a display issue - he can use 2 and I can use 8, and the file is not different between our two computers.

With spaces, I'm stuck with whatever number of spaces he chose to use for indentation instead of being able to make the code easy to read on my machine.

We're not using 40-column terminals anymore folks. It's all right to uses tabs for indentation.