Third person, in case you need a quick brush-up, is when books are narrated like this:
"Sally ran up the stairs. Her heart was pounding as she threw open the door."
First person is when it's narrated like this:
"I ran up the stairs. My heart was pounding as I threw open the door."
We see both styles all the time, but I think that third person POV is more common in the literature world at large. First person is common in YA, but used less frequently in adult novels, I find.
So... which is better?
I'm going to make my case for first person.
In first person narration, we experience the story right along with the narrator, who is almost always the main protagonist. When they see something, we see it. More importantly, when they feel something, we feel it right along with them.
This allows us a more intimate view of the story, and a closer relationship with the protagonist. In YA novels, this is important. The main reason *I* read fiction is to develop close friendships with characters. Even if they're fictional people, their feelings and experiences make me feel less alone in what I feel and experience. When I read a book in first person and spend a lot of time in the head of a character I really connect with, everything in the book just comes to life and reading is fun as hell.
Third person, however, creates a greater distance between the character and the reader. This is tremendously important in some genres (for instance, I'm reading The Girl with the Dragon Tattoo right now and the third person POV is fantastic), but I don't think it works in most YA novels. I think the thing that makes a lot of YA shine is unique character voices, whether it's sarcastic and blasé or erratic and hilarious, and third person takes away the opportunity for the development of fantastic character voices.
Unless you're trying to create that distance from the character, which can work if you're going for a literary feel to the novel, you're better off using first person POV in YA so we can achieve those close friendships with the narrator.
That's my $0.02. What do YOU think?