I think leather looks nice but for practicality you can't beat Kydex.If you want your knives to rust real quick then go hiking in wet weather wearing a leather sheath and then leave it there when you get home....bingo, rust in an instant !!!
Kydex on the other hand doesn't hold water so leaving a knife sheathed in Kydex during storage etc will give you no problems !
Like Sharp also said Kydex sheaths tend to give you more carry options, I like to rig my sheaths up for horizontal carry either in the small of my back or on my waist pack !!!

Another example of how you can get creative with Kydex rigs...