I prefer raw ASM, which I believe is used by cglib anyway. It's low level, but the documentation is brilliant, and once you get used to it you'll be flying.
To answer your second question, you should use code generation when your reflection and dynamic proxies are beginning to feel a bit cobbled together and you need a rock solid solution. In the past I've even added a code generation step into the build process in Eclipse, effectively giving me compile time reporting of anything and everything.
