Really, both..! I've been having luck mixing the fertilizer in (reasonable amounts) when I turn the soil. At the same time, I'm adding a barnyard compost to it as well. When I plant, I'll make the hole a bit deep and throw in a trowel or two of compost and about a teaspoon of the pellet fertilizer I'm using, which I believe is a 4-6-4 or thereabouts. Mix the two together in the bottom of the hole so the roots don't get shocked hitting the pellets.
My understanding of this is really based in the leaching process. The more you water, the more you're "pushing" the fertilizer deeper into the soil. By feeding the soil -and- the area immediately under the planting, you're providing both a jump start and a longer range supply. Thoughts?