I\'m rendering a news feed.
I\'m planning to use Backbone.js for my javascript stuff because I\'m sick of doing manual DOM binds with JQuery.
So right now I
But #1 is much more complicated than #2.
Not really. Once you get your hang of Backbone and jQuery and client-side templating (and maybe throw CoffeeScript into the mix, too), then this is not really difficult. In fact, it greatly simplifies your server code, as all the display-related functions are now removed. You could also even have different clients (mobile version, for example) running against the same server.
Even if javascript was turned off, the items would still show because the server rendered it via a templating engine.
That is the important consideration here. If you want to support users without Javascript, then you need a non-JS version.
If you already have a non-JS version, you can think about if you still need the "enhanced" version, and if you do, if you want to re-use the server-side templating you already have coded and tested and need to maintain anyway, or duplicate the effort client-side, which adds development cost, but as you say may provide a superior experience and lower the load on the server (although I cannot imagine that fetching rendered data versus fetching XML data makes that much of a difference).
If you do not need to support users without Javascript, then by all means, render on the client.