I like John in Brisbane's method best - but I would prefer to see chords for just the first verse and chorus - and then see the ENTIRE text of the song, without chords. This works better for search engines, and it's a heck of a lot easier to read if you actually want to understand what the song says, or if you want to sing it. Big Bad Bill is a perfect example of what John is suggesting - and it's also a perfect example of what drives me batty.
Take note, however, that Dick Greenhaus is the curator of the Digital Tradition, and the final arbiter of how chords should be submitted. As far as I know, Dick hasn't expressed his druthers.

-Joe-