From National Review Online, a good piece by Adam Schaeffer on School Tax Credits:

The most obvious advantage that ETCs have over vouchers, and the one driving governor Bush's "secret plan," is the more certain and consistent legal viability of ETCs. Education tax credits avoid the legal morass of state constitutional problems almost entirely. Both common wisdom and judicial precedent in other states consider the use of state funds for voucher payments to non-government schools to be public support of a private institution. And the intermediary act of parental choice does not always eliminate the legal difficulties this creates for religious schools.

Education tax credits are, by contrast, generally viewed neither as government funds nor as government support. The courts have never overturned education tax credits or deductions, and such credits have been explicitly upheld in all state and federal legal challenges. School-choice opponents have thrown everything, including the kitchen sink, at education tax credits, but nothing has hit the mark. And that's probably why they seem to have quit trying. No ETC has been challenged in state court since 2001, and neither Florida nor Pennsylvania, the states with the two largest programs, have had their ETC programs challenged.

I said this back in 2004 and I still feel that Education Tax Credits are the best way to go for school choice. In our State Constitution in Idaho, it forbids any state funds to go to religious schools so a voucher program would not work here or in a lot of other states. The other concern is that a lot of religious schools won't take vouchers because they're concerned if they take money directly, the government will take control of their education. I think this will avoid a lot of the issues that vouchers have while having the same benefits.