I’ve done both.
I am also a friend of mine’s Alpha reader, as we call it. I read her book as she goes. She finds it very helpful because I can reassure her that the book isn’t sucking, or offer suggestions if she gets stuck.
That being said, I personally don’t offer anything as far as criticism while she’s drafting, because I have this weird belief that the first draft is a fragile thing and it’s up to the writer to figure out how things are supposed to go. I mostly just cheer her on.
I tried having someone else read my rough draft as I wrote it this last book and it didn’t work so well for me. My first drafts are a mess. I delete characters, change names and descriptions, all on a whim. I kept thinking about what my friend would think and how awful everything was, when I really needed to think about the characters and the story. So I don’t think I will let someone read along during a rough draft again.
However, I find a lot of value in brainstorming my ideas with other people. So what I usually do is brainstorm with a couple of beta readers prior to drafting. Then when I get stuck during the first draft, I can explain the situation to my beta reader and she usually offers a good solution.
I think it depends on your writing style and what works best for you, but it’s worth trying. 😀