Is it better to make clean URL's using index files in directories or simply using
mod_rewrite rules to remove the file extensions?
There is no need to remove file extensions in order to create "clean URL's" as a URL with a file extension is no messier than one without a file extension. If you absolutely need to remove the file extensions then it is easier to use mod_rewrite as you won't need to create such a complex directory structure to achieve what files can achieve instead. As a side note if you use mod_rewrite and use a basic rule to remove the file extension you will need to make sure that all the files in question have the same file extension (ie: all files are .html files) otherwise you will need to create a separate rule for each file.