When u delete or update a record in a table the corresponding index data in the index will not delete or updated instead for an update, a new record will be inserted in the index and rebuild will remove all those records that do not match with the table records and also rebuild will not remove an fragmentation in the index segment.But you can de-fragment the index segment when u drop and recreate with appropriate storage parameters.
To my understanding , fragmentation will be eliminated in both the ways, Rebuild of index will use the existing index and hence it is much faster and needs much space on the disk.
well dropping is also a good thing, just like starting from fresh , but its a time consuming process, sometimes u are not affordable to do it.
Rebuild with NOLOGGING (no REDO will be generated ) is much faster way of creating the index, incase of failure of Index creation , u always will have the old, existing one.
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