a tow dolly would be used if the vehicle cannot be flat towed (all 4-tires on the ground) or if you have multiple vehicles that you'd like to tow. but be careful...just like some vehicles cannot be flat towed some vehicles cannot be dolly towed.
if you want to tow an existing vehicle you need to know what your towing options are...flat, dolly or a trailer. if you're looking to tow a vehicle you do not yet own you need to determine how that vehicle can be towed.
but in general many (maybe most) folks prefer to flat tow as it's a lot less hassle to hook-up and disconnect. and it's also one less set of wheels to have to deal with at your destination.