Definitely waterbased! Some say that the vagina has a hard time flushing oils out of it (which then it could trap bacteria and cause problems), hoever people use Coconut oil as a lube (or lubes with that in it) and don't have any problems. However, oil will degrade latex condoms/gloves/etc.
Water based for us. Why? We like that it is more natural than silicone based lubes. It will also be absorbed more easily by the body and we don't have to be worried too much about the clean up. As others have mentioned, it is safer to use with toys, condoms and will not cause them to degrade with simple exposure to the lube.
The down side is that sometimes I need to re apply lube when we participate with anal play.
Has any one used Sliquid? This lube is supposed to be a hybrid of the two.