One advantage of hop pellets is that since they are tightly compressed the surface to volume ratio is relatively low. As a result, less surface area is exposed to the air. Therefore, they degrade more slowly than whole hops so you can store them longer.
Hop pellets are also more compact so for a given weight they take up considerably less room in the freezer than whole hops do.
Also since bitter compounds can be more readily extracted from pellet hops one can achieve the same bitterness as whole hops of the same alpha acid level using about 10% less pellet hops.
Generally speaking, I prefer whole hops but some times you just can't find the hop variety you want in whole hop form.
- Scott