Obviously this depends entirely on what sound you are trying to create. Sometimes sounds will be made by using both sources. But i'm interested in what makes people decide if they are going to head out into the field to capture the live sound itself or use the foley studio to recreate that sound?
Which way are you usually most pleased with the outcome?
It depends on the sound I'm trying to create ;). Pragmatically, it also depends upon the availability of a quiet, reflection-free outdoor spot vs. a foley studio — both of which can be hard to find (or afford).
A project that calls for a more stylized foley track might best be served by a foley studio with an enormous assortment of props, shoes, pits, cloth, etc. Some of the magic of movies like the Lord of the Rings series came in the incredible detail and sense of heightened-reality in the foley track, with swords and armor that produced huge impact sounds in battle, to the delicate sound of parchment pages in the old books.
For a project like True Grit, which takes place primarily outdoors in desert and forest landscapes, I would hit the field to create a realistic, gritty (pun intented) foley landscape. The advantage of recording in the field, to me, lies in the accidents that happen and the sounds that you stumble upon. With a prime location, good micing technique, and a little luck, you can get field recordings that sound so clean that you'd never know they weren't done indoors. Plus, with a fully-charged ipad you can still record a foley performance to the film.
Field foley definitely works better for louder sounds, too — I would probably not record my cloth tracks in the field, but footsteps work fine. If you're not hiking too far, it can't hurt to have a couple mic stands and some thick blankets to help with outside noise and any reflections.
Best,
~Matt
To build on the excellent answer the Matt posted, I'll throw in a few other considerations.
Is the setting for the sound I need to edit into the film an indoor or an outdoor one. It doesn't necessarily make sense to record sounds for indoor scenes outdoors. That's typically the biggest deciding factor for me. Then again, there are some things you just can't get into a foley studio, and that means you've got to go out in the world to get them. That could mean recording indoors or outdoors (depending on what you can find) at a location that has what you need.
One factor that always enters into the equation is time. If there is time in the budget, and time before the deadline, I'll definitely try to get outside to record those sounds I've identified as "desirable to record oustide." If time is tight, I'll only get target the most critical "outdoor" sounds. It typically takes more time to set up for recording in the field, and sometimes the schedule just does not allow for it.
Moral of the story? You have to be creative within the restrictions you're given.
