Both methods are important, but for initial student pilot I would definitly use the second solution: maintain attitude and adjust collective.
You want to have the student visualize the attitude level related to speed. And the main target is speed. Altitude changes is slower compared to speed changes, and then, even if it requieres some attention, I do not think it's a real increase of workload.
Also at the begining, you tell your student what is the MP setting you want him to use for a specific attitude setting. A tenth of inch difference will not change a lot.
When all this speed/MP setting are automatic, you can begin to introduce some change. And usually at this level of training, your student can deal with it quite easily.
Now, on operational purpose or standard flight how I'm flying:
With a reciprocating engine I will fly by setting speed and adjusting MP. Except for maximum speed when I'm setting MP.
With a turbine helicopter, I will more oftently fly with torque/collective setting first.
Patrick