I have done in-home and daycare both. The in-home sitter was ok, but I prefer daycare and wish I had done it from the start. Some of the problems with in-home: your sitter (or her child) may get sick and not be able to watch your child for a few days. Your in-home sitter may want to go on vacation for a week and not be able to watch your child. Your sitter is in her own home, so she cooks meals and does laundry & talks on the phone & maybe has her friends over - all the while, who is keeping a close eye on your child? These are ALL problems I experienced with my in-home sitter.
Daycare (a good daycare) is awesome. They are always there, they don't close because of illness or vacation. They have multiple sets of eyes keeping a close watch on all the kids. They are structured and you know what they are being taught, and what activites are happening each day. You know what they eat everyday and who is around them. They get social interaction with lots of kids. They learn all day and are not plopped in front of a tv.
As you can see, I am a bit biased. I have nothing against any in-home providers, I just had an unpleasant experience with one. You do what you feel is best for your child, but I vote daycare on this one. Good luck!