IHttpHandler vs IHttpModule

An ASP.NET HTTP handler is the process (frequently referred to as the "endpoint") that runs in response to a request made to an ASP.NET Web application. The most common handler is an ASP.NET page handler that processes .aspx files. When users request an .aspx file, the request is processed by the page through the page handler. You can create your own HTTP handlers that render custom output to the browser.

Typical uses for custom HTTP handlers include the following:

• RSS feeds To create an RSS feed for a Web site, you can create a handler that emits RSS-formatted XML. You can then bind a file name extension such as .rss to the custom handler. When users send a request to your site that ends in .rss, ASP.NET calls your handler to process the request.
• Image server If you want a Web application to serve images in a variety of sizes, you can write a custom handler to resize images and then send them to the user as the handler's response.

An HTTP module is an assembly that is called on every request that is made to your application. HTTP modules are called as part of the ASP.NET request pipeline and have access to life-cycle events throughout the request. HTTP modules let you examine incoming and outgoing requests and take action based on the request.

Typical uses for HTTP modules include the following:

• Security Because you can examine incoming requests, an HTTP module can perform custom authentication or other security checks before the requested page, XML Web service, or handler is called. In Internet Information Services (IIS) 7.0 running in Integrated mode, you can extend forms authentication to all content types in an application.
• Statistics and logging Because HTTP modules are called on every request, you can gather request statistics and log information in a centralized module, instead of in individual pages.
• Custom headers or footers Because you can modify the outgoing response, you can insert content such as custom header information into every page or XML Web service response.

From: http://msdn.microsoft.com/en-us/library/bb398986.aspx

As stated here, HttpModules are simple classes that can plug themselves into the request processing pipeline, whereas HttpHandlers differ from HttpModules not only because of their positions in the request processing pipeline, but also because they must be mapped to a specific file extensions.

IHttpModule gives you much more control, you can basically control all of the traffic directed to your Web application. IHttpHandler gives you less control (the traffic is filtered before it reaches your handler), but if this is sufficient for your needs, then I see no reason to use the IHttpModule.

Anyway, it's probably best to have your custom logic in a separate class, and then just use this class from either IHttpModule or IHttpHandler. This way you don't really have to worry about choosing one or the other. In fact, you could create an extra class which implements both IHttpHandler and IHttpModule and then decide what to use by setting it in Web.config.