Experience is probably the best reward, but if something is offered that is a significant upgrade, taking an item once in awhile (especially at the start) is not going to have a huge effect.
I pretty much always selected experience when that was an option. I did take a nice amulet with a Wisdom bonus once, rather than experience, but I used it from close to the end of Broken Valley to near the end of the game, so probably came out ahead on experience. Near the start I did one of the quests at the farm so I got slightly less experience, but got a good necklace that I used for awhile.
