For my part, I would sack 80% of the time to keep cash coming, occupy when there is no money to gain and I can't remember any time where I have exterminated...
Sometimes, if I've taken a province that has no real strategic value to me (as being stranded after a crusade ends somewhere in turkey or other...) I would sack, destroy all that can be destroyed and then give the region to get any diplomatic advantage or in exchange for a more useful province (the cash from the sacking and destruction of building can then be really handy...) Moreover it let the accpting faction with a city that will nedd a lot of investments to become useful or might even revolt and be good to be taken once more...
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