Like Everything, It Depends
I went with Stereo for my feed, police left, fire right.
The only down side is that if police and fire are both talking at the same time, it can be a little hard to follow along (like two people in the room talking at the same time). But for me, the advantages outweigh this one disadvantage.
First of all, if something truely exciting happens, I can pull the archive files up in Audacity and seperate the left and right channels to listen to them individually.
If listening at a computer, and you don't want to listen to both (I always want to listen to both for my home town) someone can adjust the balance to only listen to police (left) or fire (right). Granted, with two different mono feeds you could just fire up two instances of winamp (or whatever you use to listen), but that's not an option with most cell phones I don't think. I know with my iPhone I can only listen to one feed at a time, so if I didn't have a stereo feed with police AND fire, I wouldn't be able to listen to both while driving around.
My advice, you'll find folks that feel both ways. It's your feed, do what YOU will most enjoy, then share it for others on RR to enjoy if they like.