From How Stuff Works:
Many race car teams use nitrogen instead of air in their tires because nitrogen has a much more consistent rate of expansion and contraction compared to the usual air. Often, a half pound of pressure will radically affect traction and handling. With track and tire temperatures varying over the duration of a race, the consistency of nitrogen is needed. Nitrogen pressure is more consistent than normal air pressure, because air typically contains varying amounts of moisture due to changes in the relative humidity on race day. Water causes air to be inconsistent in its rate of expansion and contraction. So, a humid race in the southeast United States or a dry race in the desert western United States could make for unpredictable tire pressures if "dry" nitrogen were not used.
Nitrogen is also used in the high-pressure tires on large and small aircraft.
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Bottom line, nitrogen is better. It also costs more, and one would have to carry a tank with them to keep the tires topped off. If one did not have a flat, or something to cause the use of large volumes of nitrogen, a small tank would suffice, probably in the 40 cubic foot range. A simple regulator and filler hose would work.
Is it worth all that extra? Maybe if you're running NASCAR, but for regular freeway driving, an 80/20 mix of regular compressed air would seem good enough for me. (even though the 80/20 description is not totally accurate to the nth degree, much as the .357/.22 arguments recently demonstrated)
Steve