Custom mobile site or responsive design?

I had an interesting conversation at a meetup a few days ago, and again today with someone else. In terms of making a site mobile-friendly, there seems to be a growing divide between two camps:

1 -- Mobile Site: Create a mobile site that is different than your main site, but typically includes most of the content.
2 -- Responsive Design: As the resolution of your user shrinks, the content on the site adjusts to fit (often with sidebars disappearing, etc).

I'm inclined to be in group #2, since determining what a "mobile" device is can be difficult. While the situation can vary depending on the need, choose your preferred option below. Vote and then leave your thoughts after that.
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