First, the most important thing to remember is that both butter and margarine are fats. Canadian nutrition recommendations emphasize that the total amount of fat we eat is more important than the type of fat. Most of us eat too much fat so regardless of whether you choose butter or margarine, eat less. Butter and margarine do contain different types of fat, and that's where the confusion lies. Butter contains saturated fats.
Saturated fats seem to raise blood cholesterol levels, so that's why many choose margarine instead.
Not all margarines are the same. Many are made from partially hydrogenated vegetable oils, which contain trans fatty acids. These trans fatty acids are also thought to affect blood cholesterol levels, and therefore, may not be better than butter and the saturated fat it contains. Margarine made with liquid vegetable oil is the better choice. When choosing a margarine, choose a soft margarine whose first ingredient is liquid vegetable oil.