Unfortunately it's a necessary evil sometimes. If people could hear the truth without being offended, or without using the information for some terrible (or selfish) purpose, then there'd be no problem.
I think it all depends on the person you're asking. I, for one, would sooner be told the ugly truth then a pretty lie because alot of the time the truth isn't as bad as the disappointment I feel when I find out I've been lied to.
It depends on the circumstances. Sometimes a lie is preferable to the truth and recent studies have suggested that lying is an integral part of human interaction.[link]. According to this study lying is a "social lubricant" that allows us to engage in a civil manner, which makes sense. Just imagine interacting with someone who was completely honest all of the time about what they think of you, the things you do, or that they have naughty thoughts/feelings about your girlfriend/boyfriend. Revealing that information could be damaging to the relationship. Some deception is necessary.
You can't say objectively which is better. Actually - you can. Truth is. This is the truth. It's not a lie. Lie would be if I said lies were better. The thing is, people are raised to accept lies as truth. From "you did well, Bobby", to "You'll go to hell for whatever reason", to "it will get better", to "you're not fat you're big boned". People have their feelgood lies, that they know they're lies and get offended at the truth.
For example, saying to a fat person "You're fat and ugly" is better than saying "you're overweight and it is fine, you're beautiful for what you are." The point is, if you say what you feel, and your opinion matters to them, chances are they'll fix themselves.
On personal level, I always choose truth over lies. Either from me or against me. I would rather piss off someone who I don't like by telling them they're retarded than keep them around me in fear of offending them.
But on global level, lies are used to control people. You have religion and governments doing whatever they can to get people to follow or agree with them. You have marketing which is almost always lies told to sell product or ally people behind something. To be honest, I can't think of any example of truth used today to control people. People, when in groups, prefer lies.