Delegation is a means of using the composition technique to replace some aspects of coding you would otherwise subclass for. As such, it boils down to the age old question of the task at hand needing one large thing that knows how to do a lot, or if you have a loose network of specialized objects (a very UNIX sort of model of responsibility).
Using a combination of delegates and protocols (to define what the delegates are supposed to be able to do) provides a great deal of flexibility of behavior and ease of coding - going back to that Liskov substitution principle, when you subclass you have to be careful you don't do anything a user of the whole class would find unexpected. But if you are simply making a delegate object then you have much less to be responsible for, only that the delegate methods you implement do what that one protocol calls for, beyond that you don't care.
There are still many good reasons to use subclasses, if you truly have shared behavior and variables between a number of classes it may make a lot of sense to subclass. But if you can take advantage of the delegate concept you'll often make your classes easier to extend or use in ways you the designer may not have expected.
I tend to be more of a fan of formal protocols than informal ones, because not only do formal protocols make sure you have the methods a class treating you as a delegate expect, but also because the protocol definition is a natural place to document what you expect from a delegate that implements those methods.
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