This is always a pretty significant decision that just about everybody wrestles with, and the right answer -- and the reasons why -- varies org to org. Options fall into four major categories: Chatter, Activities, Notes, or Custom. There's pros and cons to consider:
Chatter
Pros: It's there, it's easy, and people get lovely notifications
Cons: fundamentally public in nature. Folks CAN access chatter posts even if they don't have access to the record on which the post was made by viewing the posting user's feed. Not good for more confidential things. Also, not reportable.
Activity Records
Pros: Intuitive place to put call notes -- golly it's right there on the record of the call!
Cons: There are security considerations, because the visibility settings aren't as detailed/robust as with non-activity records. By default only reportable up to a year, but you can ask Salesforce to extend that.
Notes
Pros: Rich text, more fully featured, plenty of space. Full security/visibility configuration options of any other object. Easily add images, links, etc.
Cons: Not at all reportable, not really. It's possible to get a really basic report that they're there with some work, but you can't report on the content of the note at all.
Custom
Pros: Create your own object to store notes, report on it, have total security control.
Cons: It's a bit inelegant, you're passing up the superior user interface of the other options, and it adds to your overall customization burden.
This is a place where Nonprofit Cloud offers you HUGE advantages, because over there you'll find more options.
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