The book publishing industry has gone through a serious reform since e-books began to rise in popularity, with the rise in "self-publishing" authors.
Self-publishing's premise is that anyone can become a small publisher or publish a book. In doing so you retain all the rights to your work and take home a larger royalty. Plus you have control over the price and cover, every major decision is yours!
Would you self-publish a piece of work, or prefer the traditional publishing approach?
I think Bryony's answer gives the most important context on self-publishing. Self publishing is expensive, and lacks publicity. And all the work that publishing houses do (copy editing, formatting and all that) still needs to be done if you want to deliver a professional product.
I think it depends on your goal. To me, as a fiction writer, being published by an established publishing company is a bit of an ego boost. I feel validated knowing that a professional thought my work was good enough. It's also probably going to be distributed more widely and advertised better than I could manage on my own (though I suppose that's different when your readership is already huge, established authors can self publish and actually make money, or give books away as a way of giving back to their fans). As a reader I know I can trust publishers to put out a consistant standard of work, whereas self published work is sometimes terrific and sometimes riddled with spelling, grammar and layout mistakes.
On the other hand, self publishing gets your stuff out there, to your readers faster, and can be a great way to reach a niche market. If you're putting out something like a family history or a rule book for a game you've invented it makes sense self publish a small run of books or use a print on demand service like Lulu.com rather than print tonnes of copies when you know only a handful are likely to sell.
One the one hand I really like the ability of Self-publishing in order to get your words out there. On the other hand, one thing I've learned that by doing so, you're not only an author. You now have a bunch of hats to juggle, including editor, cover artist, marketing team, format person and more. And a lot of those are not your core skills is you're a writer first and foremost.