It depends on you needs...
virtual compatibility mode or physical compatibility
mode. Virtual compatibility mode virtualizes the mapped device and is
generally transparent to a guest operating system. This mode also
provides some VMFS volume advantages, such as the ability to create
snapshots. Physical compatibility mode provides minimal SCSI
virtualization of a mapped device, and the VMkernel passes almost all
SCSI commands directly to the device, which enables closer VM and LUN
integration.