Dry yeast has a bad rap, and I'm not really sure why. Perhaps it was once produced by baking yeast manufacturers without much regard to strain purity or microbial contamination. Maybe it's because brewers used it to ferment their first batches of beer, which weren't nearly as good as the beer they're now able to make with liquid yeasts (despite likely differences in cleaning, sanitation, oxygenation, pitch rate, temperature control, water treatment, ingredient freshness, wort cooling, oxidation prevention, recipe formulation skills...). After six years of pitching nothing but liquid yeast into my homebrew - at least for primary fermentations - I'm beginning to use dry yeast again. My experience is limited to one batch of hoppy amber ale, but the beer was wonderful. Here's what dry yeast has going for it:
1. With brands such as Danstar and Fermentis, quality is no longer an issue.
2. When yeast cells are dehydrated, they don't metabolize glycogen (stored food) to stay alive. As a result, dry yeast cells have healthy glycogen reserves and therefore don't require yeast starters. In fact, starters are detrimental to dry yeast. That's because glycogen gets used up pretty quickly after pitching, and homemade starters are less effective than laboratory propagations at building it back up.
3. It's easy to achieve a target pitch rate*. Simply weigh the yeast and go. With liquid yeast, your pitch rate is a guesstimate based on the starting cell count, the size of your starter and your method of propagation (e.g. shaking vs. a stir plate).
4. Pitching dry yeast and then aerating your wort, or vice versa, doesn't result in the oxidation of alcohol from a yeast starter.
5. With a small amount of hydration water instead of a yeast starter, changes to your wort's gravity and bitterness are minimal.
6. Dry yeast is much more shelf-stable than liquid yeast.
7. Dry yeast is becoming more expensive, but it's still cheaper than liquid yeast.
Commercial craft brewers typically pitch yeast slurries from previous batches of beer. With a microscope and scale, it's easy to estimate the number of cells per pound and pitch the proper amount of yeast. Pitching dry yeast is a pretty similar process, except the slurry contains water instead of beer and you already know the number of cells.
Until contemporary evidence validates the superiority of liquid yeast, its only advantage seems to be the large number of available strains. Whenever the ideal strain for a given batch of beer exists dry form, I plan on using it.
*According to the Siebel Institute, a good pitch rate is 1 million yeast cells per milliliter of wort per degree Plato of gravity. I like to pitch 0.75 mcells/mL/P for ales and 1.5 mcells/mL/P for lagers, which was initially suggested by George Fix and is now assumed in Jamil Zainasheff's Pitching Rate Calculator. For a quick conversion from specific gravity, use P = 1000*(SG - 1)/4. For a more accurate conversion, use P = 116.716*SG^3 - 569.851*SG^2 + 1048.046*SG - 594.914. The cell counts given by dry yeast manufacturers are guaranteed minimums. Based on cell counts conducted by Jamil Zainasheff and Danstar, it should be safe to assume that dry yeast contains 20 billion cells per gram.