The length of the term isn't as important as the frequency.
The long tail is a marketing theory that existed well before, and outside of, search but given the depth of search engines it's the prime example these days.
What it comes down to is that, while the top end of business is most visible, the bulk of activity actually comes from the less frequented, but far more volumous, individual. Basically while you see a lot of people searching for "pizza", if you add up all the people searching for pepperoni pizza or pizza delivery at disneyland you'd get a number that's far bigger than the bulk terms.
Draw this on a chart and what you get is a very short spike (the top term) and long but much lower quantity "tail". Because this tail goes so deep with all nuances that people input, it can mean big volume and better relevancy -- and quality trumps quantity any day.
As far as what's better, well as the longtail suggests, you'll get more volume from that. More so it's much easier to attack longtail terms than top ones. Of course the big terms remain the focus: it's appealing to go for the big wins and easier to focus on a few terms than thousands but even still you should avoid fixating on the top, the volume of the middle and bottom quartiles can be amazing and again there's that relevancy card.
Related reading: http://www.amazon.com/The-Long-Tail-Business-Selling/dp/1401302378