We are very fortunate to have, in the place where we currently live, a space around our house which enables us to give a completely free range to our chickens, and also to keep roosters without anyone being bothered by their crowing (though in my eyes, the crow of a rooster is actually soothing – quite unlike the honking of cars).
The advantages of free range are numerous; first of all, we save on feed costs, because chickens have truly free access to every corner of the yard, and find part of their own food – bugs and weeds. This gives us more nutritious eggs and also provides free pest control, and some weed control. We do, of course, also give them layers' grain (we buy a large sack which lasts us for several months) and whatever kitchen and table scraps we have.
Free-range also means less time chickens spend in the coop – and thus, a less smelly coop which attracts less flies, and doesn't need to be cleaned quite so often. In addition, it is very entertaining to see chickens get into every nook and cranny of the yard. If you want to grow vegetables and free-range your chickens, of course you'll need to fence the vegetable garden in, because chickens will eat mostly everything (we currently don't grow anything but herbs, which the chickens don't fancy).
The most obvious disadvantage to free ranging, of course, is in exposure of chickens to predators. We have had problems with foxes before – they operate during the night, very slyly, but lately we had chicks disappear during the day without a trace, which made me suspect birds of prey (we have several kinds in our area). We can fox-proof a coop so that chickens are safe at night, but we can't give true protection against birds of prey, as long as we let our chickens free-range.
Still, as much as I hate to lose birds, taking everything into account I believe free-ranging is the best option, overall. Keeping chickens always fenced in, even if we could provide a large coop and mesh-covered run, would mean greatly increased food costs, the loss of pest control we currently enjoy, and having to muck them out far more frequently. I will go as far as saying that if we couldn't free-range, perhaps keeping chickens wouldn't even be practical for us – no more than 3-4 birds, anyway (we currently have about 30, including chicks). Obviously we wouldn't free-range if we were so plagued by predators as to lose all our flock; but occassional losses are something I have learned to mentally steel myself against.
What methods do you chicken-keepers use? Do you free-range your flock?