Pros:

Cons:

• Does not create a slide show of the pictures. This is an often used feature in Intranets. Example: A news article with a direct link to the slide show view of your company's last event or party.
• Although it is possible to email a link to the file (as is also the case in a Picture library), you can't easily embed them in an email or Word document. If you want to do this, you need to manually download the files you want to embed and add them manually to the email/document.

Picture library
More info about the picture library: http://agsci.psu.edu/it/how-to/use-picture-library-in-sharepoint-2007

Pros:

• Has a slideshow view of the pictures it contains.
• Can only contain pictures and is optimized for that.
• you can embed a picture directly into an email or Office document using the "Send To" action menu item.
• You can use the /_vti_bin/imaging.asmx web service to execute Upload/Download and other operations related to picture libraries: http://msdn.microsoft.com/en-us/library/imaging.imaging_members(v=office.12). Asset libraries don't have such a service.

With a Picture Library, users can easily send pictures (one or more) in an email (embedded in the body or as an attachment) or automatically add them to a Word document. With an Asset Library, users must download the files and manually create the email / document. Both have the option email a link to the file.

Cons:

• Does not have the larger thumbnail option of a picture when you hover over the item.
• The library menu is 2007 style, and thus looks different from other SharePoint 2010 libraries.
• Has a complicated way of uploading pictures using the "Picture Manager" application.