Though it wasn't always a simple decision whenever I started a story, I used to think I had it figured out.
It sort of came natural to get inside a character's mind and share the narrator's limited viewpoint. As a result I used to enjoy writing in 1st person. I still do.
However as I got to developing other characters and a more complex story, it no longer became a cut and dry decision. I tried to compromise by switching between viewpoints (splitting off on chapters) and a 3rd person voice to bridge the gaps.
Now in 2011, as I'm rewriting parts of the story, I'm contemplating if it is worth dropping off that 1st person cliff and using 3rd person for most, if not all of the stories. I'll greatly miss the 1st person voice, but the 3rd person voice may work out better in the long run. It's a trade off as with any decision.
When I am unsure of something , I turn to the web and do a search. I like to see what other people have to say on the same matter. This posting helped push me over that cliff.
That said, I'm trying it out. I've conducted a few trial stories using 3rd person limited to a character or a couple of characters. I've done it before, various years. So far the results have been pleasing with most attempts. It may not be much of a loss to make the switch from 1st to 3rd person narration. I'll see.
So far I notice these differences with my own writing:
1st person: easy to get into the thoughts of a character. I can write what the character is thinking. What the character is feeling, not so much. I can write what the character thinks he or she is feeling. Things like body language tend to get dropped off. It's hard to see what the narrating character is doing when they are talking or thinking. At least I find it harder. The narrator becomes an "existence". At least that is my best attempt at describing the experience of living as a sentient being taking in all the outside stimuli and making sense out of my environment.
3rd person: Body language of the character becomes much easier to describe. What the character is feeling also becomes easier to describe. It is easier to break through situations where the character doesn't know what they are feeling or think they feel one way but really feel another. (unless the character's internal confusion is something I want to play off, then that effect seems to get lost easier than in 1st person) But getting into the thoughts of the character seem to be trickier. I can do it, but it feels more distant and doesn't make as much sense. But this distance may not be a bad thing. Just takes getting used to. Limiting to one character at a time helps to keep some mystery about other characters as well as the whole plot (something that is nice with 1st person). I also get the "existance" without having to be involved in the story (so to speak).
I'm interested to see what your viewpoints are on 1st and 3rd person narrated stories? Which do you prefer to read?