Instinctively, I'd say 'and' is likely to cause you less problems, although I can't think of a good reason not to use &.

Are you targetting a phrase that inlcused the word 'and' or two seperate keywords, and you targetting both with a single link and seperating (joining?) them with & or and?

i m confused about using "widgets & gadgets" and "widgets and gadgets"

[edited by: caveman at 5:04 pm (utc) on Dec. 24, 2008]
[edit reason] Removed specifics, per TOS [/edit]

If it was me, I'd use two keyphrases rather than one : "widgets" and "gadgets". You have to think in terms of the Internet searcher and what he would most likely use in a search query.

[edited by: caveman at 5:05 pm (utc) on Dec. 24, 2008]
[edit reason] Removed specifics, per TOS [/edit]

i would use the most common or natural usage.
if there are several occurrences i would considering mixing up both usages.
when using the "&" i would suggest using the "&" html entity as it helps validation and minimizes ambiguity.

Echoing the "common and natural usage". Also, I got some good advice from Tedster on a similar issue:

You said you currrently use "blue / red widgets" - so there is no direct proximity for words "blue" and "widgets". If the title you used were "red / blue widgets" you might rank better for "blue widgets" but worse for "red widgets".

Thread here: [webmasterworld.com...]

Regardless of natural language- you are trying for two separate keywords. You need two separate links.

Frankly, you would be best with two separate destination pages as it is much easier to get a focussed page ranked. By trying to capture two keywords on the same page, you will likely rank for neither. Remember that you need co-occurences, and preferably properly constructed markup, using the Header tags (<H1>, <H2>, <H3>, and possibly further). Not so easy to do properly for an unfocussed page.

Remember that "and" and the character ampersand are what the search engine connsiders as Stop Words. In other words, if you use either within a keyphrase the search engine will break up the keyphrase into two parts. This is why, in your case, it is best to start optimizing for two separate keyphrases at the onset of your SEO campaign rather than realize later the mistake of keeping the stop word within the keyphrase.

I think if your going to use just 1 link then u must use the word that people will use more while searching!

So people use and or & more?!