richbc2: When you installed via directly into the jar folder, did you remember to delete the META-INF before transferring all of the Optifine items? I've forgotten to do that before and the result is the same.
I think it depends on personal preference as well as your system. Personally I like to have Optifine because I only have a laptop to play on. Even though its a pretty great system, my graphics card isn't so that kinda hinders game play when I run a bunch of mods.