By the PHB, it's pretty clearly Spells Per Day.
However, IMC we made a Feat that let Sorcerers or Bards switch it to spells known, but you don't get any benefit from +CHA items (or -CHA poisons). A Sorcerer honestly doesn't need any more spells per day, but they desperately need more known spells, so this is an increase in power.
We're planning on changing it to be the standard for those classes (house rule to make them more different). It's worked well so far; most characters will only gain one spell per spell rank until they get their CHA way up, so it's not a huge increase, but it keeps Sorcerers from being so monotonous ("hmm, it's combat, I only have 3 spells I can use, guess I'll go with the Lightning Bolt again") without infringing on the Wizard's specialty (knowing all kinds of really specialized spells)