If you're fanatic about running, then you'll probably love both the treadmill and running outdoors. Both exercise formats have benefits and drawbacks. Let's discuss the treadmill versus outdoor running so you can ascertain which is going to be better for you and your goals.
Both exercise formats have some degree of impact. The road has a far higher impact level than a treadmill, yet a grass surface cushions the degree of impact more so than a standard treadmill. If you perform a lot of running, you will want to be wary of the degree of impact that your body encounters, otherwise your joints will inevitably sustain long-term damage as a consequence.
For anyone who has already sustained a joint or ligament injury throughout the ankles, knees or hips, it may be wise to avoid running outdoors on on the treadmill altogether. A more suitable form of cardio could be of a low-impact nature such as the bike, cross trainer, recumbent bike, rower etc.
Both outdoor running and the treadmill can be as effective as each other. Effectiveness really comes down to your overall exercise and nutritional regime. Often the best indicator of the effectiveness of a particular exercise is how much you enjoy it. Think about it, if you don't enjoy running outdoors, then you're probably not going to stick to a consistent regime. Additionally, you won't put in the same amount of effort as if you really loved running outside!
A run outdoors is certainly convenient. Put on your running shoes and away you go. But there could be many problems associated with outdoor running. One problem may be that you live in the middle of the city where it's completely flat and overly crowded. Another may be that you don't feel comfortable running outside in the dark after work.
The major benefit with the treadmill is that you can run without having to dodge people and adjust the hill settings as you see fit. The drawback is that, unless you have a treadmill available at home, you will have to make your way to the gym and possibly even wait for the machine (probable during peak hour at the gym).
Have you ever been in a gym and heard a "thud", only to see that someone has fallen off the treadmill? I'm nearly up to double digits - it's not an uncommon occurrence! Some people just cannot get the hang of a treadmill, so if you fall into this category, it may be wise to find an alternative.
Outdoor running presents many risks also. I've twisted my ankle a number of times from unexpected dips in the surface. If you're running multiple times per week, this can become a real issue.
For high intensity exercise, I always try to steer clients away from the treadmill. If you are running near your maximal capacity, it is far too easy to lose your balance on the treadmill in the middle of a sprint. My advice would be to stick to outdoor running in such a situation.
Of course there is the obvious - a treadmill or gym membership is far more expensive than just running outside. You get fresh air with outdoor running. You could watch television while on the treadmill. The list goes on...
The point of this article is that the treadmill is not necessarily "better" than outdoor running. Running outdoors is not necessarily "better" than the treadmill either. It boils down to your personal situation, lifestyle, goals, medical considerations and personal preferences.
For further reading, here's an article I published entitled "The E Word...Exercise"