I would prefer the whole hanging off the leg thing, I think that pushing them to the side would get in the way, I like when they do it in Doujins though.
panties on is hot and all but i would rather she take them off because it does in fact get in the way but i have found that when doing it doggy style in the pussy its easier to have her keep on the panties
I've had sex both ways, I don't really mind either way.
A thing that bothers me though is that I can't go on with some girls - I like keep going and bring the girl off several times.
Yet some girls try to have sex as if it was some sort of "spiritual" mojo that has to be done "just right". Nothing's as much a killjoy as your partner moralizing about what good sex is instead just doing it.
Word of advice: the more you think about it, the more you keep it at a hands distance. Just get into it, the more you give yourself over to it, the better it gets.
...with or without panties on. Just go with the flow.