Rudders, outboard or inboard

[Butterman]

I think a lot of posters on here suffer the logical fallacy, Argumentum Ad Populum, assuming that because the majority of boats do one thing, it must be the best way. While this statistic does lend support for a hypothesis, it is not proof of anything.
My personal opinion on the matter is that most boats use inboard rudders for 3 reasons:
1) Looks.
2) Security from rear impact.
3) Hydrodynamic efficiency.

There has also been talk, including myself, about the greater leverage imparted on the keel by an outboard rudder. This is true. As someone else correctly pointed out, however, leverage ≠ hydrodynamic efficiency. Leverage does, however, equal efficiency of steering force (easier on the arms)

A quick(somewhat) lesson about leverage....

As we know, energy cannot be created or destroyed, so the idea that "leverage is just better" is a falsehood. The truth is that leverage is a trade-off. Think of the last time you used a screwdriver to pry the lid off of a can of paint. The longer the stem is on the screwdriver, the easier (less force is required) to pry the lid. the trade off, however, is that your hand must move a greater distance to achieve the prying. So leverage is a transaction trading distance/duration for ease. This is called Mechanical Advantage(MA). It is expressed as a ratio of output force achieved per unit of input force. So, a MA of 5:1 migh mean it requires only 100lbf to move a 500lb weight. however, it requires five times the duration/distance to achieve it. (Think of your boat winches! Your arm moves several times the distance that the rope does, but the force imparted by your arm is also multiplied several times)
(As a side note, the opposite can be achieved as well, trading ease for distance. Think trebuchet. This is called mechanical disadvantage [even though it can be advantageous])

This relates to rudders in the following way:

Imagine the outboard rudder as a 10 inch screwdriver(for ease of explanation lets call this a 10:1 MA), while the inboard is a 5 inch one(5:1 MA). The outboard rudder must be held off course for a greater duration than the inboard rudder, in order to turn the boat the same number of degrees. This translates to greater drag and less hydrodynamic efficiency.
Don't forget though, that with all things, there is a trade off. The trade off in this situation, is that the inboard rudder must impart greater force in order to turn the boat the same number of degrees. This translates to more stress on steering systems, but a faster turn. With modern steering systems, which have very little friction loss(loss of effort) between the steering wheel and the rudder, this is not as much of a problem (however i do blame this for delamination on fiberglass spade rudders). Back in the day, however, leverage was more important than efficiency, as a considerable amount of the helmsman's effort was lost before it made it to the rudder (wood grinding on wood, etc).

The considerations above, as well as those in my last post, leave me with the following conclusions:
1) Both systems work fine.
2) Outboard is marginally better for blue-water cruising boats, as, at least for most cruisers, Reliability/Simplicity > Performance.
3) Inboard is better for racing yachts for the inverse priorities.