So you go to your local homebrew supply store and they have both pellet hops and whole leaf hops and you're not sure which ones to get because you don't know the difference between the two. Well, it's really quite simple. Pellet hops are just pulverized whole leaf hops that look like rabbit food and there are some differences between them. Since pellet hops are pulverized and crushed up during processing, this also crushes up the lupilin glands in the hops. What does this mean? It means that you will be able to isomerize the alpha acids in the hops better and gain a higher extraction rate. This translates to mean that you'll get more bitterness out of your hops. However, this does not mean that you won't get the same out of whole leaf. Since whole leaf hops aren't processed then they aren't as harshly handled. So that means there are MORE lupilin glands in whole leaf hops, which also means that whole leaf hops generally have a higher alpha acid rating. Usually, pellet hops have a lower alpha acid rating than whole leaf hops. Let's say that cascade pellet hops have a 6.0% rating, if you look at whole leaf of the same variety they'll have a higher alpha acid rating of say 6.8%. Because of this I firmly believe that you get the same utilization out of either kind of hop.
Many people claim that whole leaf hops absorb more wort than pellet hops. I believed this for a while but then decided that ounce for ounce both pellet hops and whole leaf hops absorb the same amount of wort. It just looks like whole leaf absorb more wort because they aren't pulverized. One good thing about whole leaf hops is that they can easily be filtered out of the wort before transferring to a fermenter. Some people actually squeeze the absorbed wort out of the hops to get as much as they can out of them. If you do this make sure everything is sanitized!
Contact time. Pellet hops, since they are pulverized, have more surface area contact to them, which increases utilization as well. Whereas whole leaf don't have as much contact surface to them, but again, since they have more lupilin glands and higher alpha acid ratings then I believe they are equal.
One other thing, since pellet hops are condensed into a smaller form, their shelf life is usually longer because they aren't exposed as much to oxygen and heat. However, any kind of hop that isn't properly stored in an oxygen impermeable bag will degrade at a higher rate regardless of storage in the freezer.
What I believe it comes down to is personal preference. If the variety I'm looking for isn't in whole leaf then I'll buy pellets and vice versa. I personally use whole leaf because they work the best with my brewing system.
I hope this clears up some confusion as to whether or not you should use pellets or whole leaf. When it comes down to it, they are both hops, so use what you can get, especially during a hop shortage.
One more note: I firmly believe that whole leaf hops are better for dry hopping than pellet. I believe that you extract more flavor from the actual leaf with whole hops than the pulverized leaf from pellet hops.
Happy brewing, and don't forget to dry hop those pale ales and IPA's! I'll be posting recipes soon, too.