The downloading option seems to be a newer thing in the world of PhotoPass, as of this year. Last time I ordered a CD (early this year, with my holiday 2010 pictures), there was not a downloading option.
Still, I would get the CD. Maybe they are offering a download option now so that people can get their photos faster and not have to worry about mail delays. But I like the idea of having them on a CD, especially since you have the coupon for the free CD.
I guess it all depends on how quickly you need the photos - if you want them immediately then get the download.