If there are two published versions of a paper, which one should I cite?
I favor acting in the following way:


If you've only read one of the versions, cite that one. God knows what's in the one you haven't read.
If you've read both versions:


if they are identical relative to the information you need, publication in a journal or proceedings volume takes precedence over (re)publication in a career collection (e.g., "Selected works of Jones"), which takes precedence over arxiv, which takes precedence over non-arxiv manuscripts.
if they are not identical relative to the information you need, cite whichever one contains the best version (where best probably needs to be decided on a case-by-case basis).