1) 'Kill/enslave all' gives you the 'swift justice' line of vices. The first one increases dread, but if you keep doing it you will gain hapiness penalties.
2) 'Kill/enslave ringleaders' is the neutral one
3) 'Release all' starts the 'merciful' virtues which increase hapiness but decrease dread.

Remember that it only works if the rebels have rebelled against you, not against the other factions. The virtues and vices get progressively worse; after a while the hapiness/dread penalty will outweigh the hapiness/dread bonus. There is also the 'random justice' vice which you are supposed to get if you alternate between options one and three, but I have never seen that happen. 'Random justice' might just be an extension of the 'swift justice' line.

But what are the direct effects on hapiness of these options? Does release make the population happier, but increases the size of future revolts? Does 'kill/enslave all' make the population less satisified but decreases the number of potential rebels? Or is there no effect, apart from the vices?

BTW Dough-Tompson, I thought you could only get butcher if you slaughtered a thousand captives in battle? I am quite sure the 'butcher' and 'swift justice' lines are separate: I once got a general who was a mercifull bloodlover .