Ethernet cable, no debate about it. When I started playing 'Killzone 2' I was getting constant disconnects, sometimes only finishing one out of every 10 matches, and that was with a Belkin N+ modem-router. I tried a wired connection, and I haven't had a single disconnect since I set it up a over a week-and-a-half ago.

I now have to put up with a 15m ethernet cable running from my kitchen through my loungeroom, but the result speaks for itself.