This still leaves the question. Which method are folks using.. absolute or relative? Love to hear from a few Drupalers especially if they have made a decision based on this issue like I have. I have been doing absolute, now, but am thinking about going to relative and just not worrying about the images breaking.
Generally speaking, nowadays, I always use absolute for non-design elements. I can not, nor wish to, control where my content shows up, and that means I should be as amicable as possible to making it show up correctly.