Hi David,
The advantage in placing the effect directly on the video is that you can place multiple effects there (up to 7 inPD7) & you can still adjust them each separately by clicking on the Effect button which appears when you do it this way. You can also deselect the effects you don't want.
The only disadvantage might be that dropping the effect straight on the video forces the effect to affect the whole of the clip, whereas putting the effect on the effect track you can drag how long you want the effect to be & it could cover several clips.
Hope that answers your questions.
Regards,
Peter B.