I am mainly a leather fan, just out of tradition, and it tends to be a bit less abrasive as long as it doesn't get dirt/debris etc in it.
However, for more of a foul weather 'working' sheath Kydex, if done right, is starting to grown a little on me. By done right, I mean doesn't chew up handles, and isn't completely tearing the finish up the very first time you use it (tho over time, like any friction, it will cause wear). Some of the biggest benefits I see is in maintenance. If you get dirt/grit etc. in kydex, you rinse it out...usually not the case with leather, at least not without having some negative effects. If you get caught in the rain, slip in the stream, whatever, kydex dries out, no problem. So particularly if you're operating in a more rainy or gritty type enviroment, Kydex is worth serious consideration.
As another mentioned, the Spec-Ops brand is an excellent compromise, provided it fits your blade. Decent universal liner, good pouch/compartment you can get a firesteel, small folder, etc in, readily available, very reasonably priced. However, if you have a larger chopper, it probably isn't an option. Unfortunately LMIW went under...their sheaths looked to very nice.
Don't overlook Martin Swinkles...I'd love to have a few of his sheaths...in fact, if I go the custom route again, he'll probably get some of my $$...
BOSS