Well, I do a little of both, but in a quasi-predictible manner...
1. I start to read the material cover-to-cover; if the flavor/fluff factor is compelling, I'll finish it in this manner.*
2. If the flavor/fluff doesn't keep my interest, I'll flip through it looking at specific rules-components that I might be interested in.
Regardless of either of these, once I transcribe all the material I am using in my game into our rules, I shelf the book or burn the pdf to CDRom. I tend to grab and flip (or open and scroll) through random books from time to time just to see if there's something I'll use now that I didn't use before, but most everything I will use gets noticed the first time around.
And finally, I have bought some material that was just gawds awful; I tend to give it away to someone else.
* It is interesting to note that, if not for the SRD, I likely would have never finished reading the Core Rules. Go figure.