Let me give the pros (+) and cons (-) of a few selected possibilities:
Source only:+ smaller distribution package.- inaccessible on systems without groff.
Uncompressed formatted only:+ accessible even on systems without groff.- the user can't generate a dvi or postscript file.- waste of disk space on systems that also handle compressed pages.
Compressed formatted only:+ accessible even on systems without groff.- the user can't generate a dvi or postscript file.- which compression format would you use? .Z? .z? .gz? All of them?
Source and uncompressed formatted:+ accessible even on systems without groff.- larger distribution package- some systems may expect compressed formatted man pages.- redundant information on systems equipped with groff.
IMHO it is best to distribute source only. The argument that it's inaccessible on systems without groff does not matter. The 500+ man pages of the Linux Documentation Project are source only. The man pages of XFree86 are source only. The man pages from the FSF are source only. In fact, I have rarely seen software distributed with formatted man pages. If any sysadmin is really concerned about having man pages accessible then he also has groff installed.