2. PPLNS, Proportional, etc etc... (Ghash.io, Eligius, Kano, Slush, BTC Guild, etc...)
This payment model essentially waits for a block to be mined... then uses some algorithm to distribute the proceeds based on a miner's contribution to the pool. It sounds fine at first however there are some main issues that are unacceptable. This payment model allows the pool to be dishonest. There's nothing stopping a pool from doing a few things.
1) A pool can choose to not report a block mined to the members of the pool. Essentially it'd allow the pool to keep the 25 bitcoins.
2) A pool can 'make up' miners and say they did 'x' amount of work or manipulate stats of either their own miners to give itself a bigger share of the 25 btc.
3) You have to 'trust' that the pool operator(s) are being honest about the statistics.
Simply put, I do not trust the pool operators.