Edit > Stroke vs. Stroke Layer Style
There are two ways to apply a strokeas a layer style or by using Edit>Strokeand as you can probably guess, there are advantages to each. If you have objects on a separate layer and want to add a stroke, then using a layer style has two distinct advantages: you can edit the stroke at any time, and the stroke automatically resizes as you resize the object on the layer. On the other hand, you cannot apply a filter to a layer style, so if that's one of the options you're looking for, it's better to use Edit>Stroke.
Regardless of which method you use to add a stroke, there is one factor that probably won't change, and that is using Inside as the position of the stroke. The reason is, using Center or Outside as the stroke position results in a stroke with slightly rounded corners, while the Inside position will create sharp corners. (Oh, by the way, one of the quirks of the Stroke layer style is that it continually defaults to rather odd settings: a red stroke positioned Outside. Chances are, you won't find yourself using that setting very oftenor at all!)