Our preferred method the static fit is where we place the rider on a device called a fit cycle. The fit cycle allows for a wide verity of adjustments 44cm-70cm frame size to measure and compare crucial angles of various points of the body to give the rider an ideal position for their specific needs. We use this from the serious pro to the weekend century tour rider.
Formula fitting is a very popular method to fit a bike. With formula fitting you will measure the body's inseam, height etc... then multiplying these measurements by fractions to derive a saddle height, reach, handlebar height and seat set back. It is fast and if done correctly fairly accurate most of the time. A formula fit is a great place to start but should always be checked via the static fit to correct for flexibility, riding style, experience and other fit issues unseen by a tape measure. Formula alone just doesn't work.
A data base driven fit is a very popular method of fitting. A database driven fit takes a persons physical measurements than averages those measurements to the other fittings in the database thus deriving a recommended fit. The database fit method is a very successful method assuming your measurements where taken in the same manner that the database was created. The more data in a database the better the fit for the majority of the people excluding anomalies. If you want a better fit using a database look at companies that use an extensive database that reaches beyond the physical length of a body part. i.e. Seven Cycles. These companies will use more than just body measurements. They will look at body measurements plus riding style, flexibility, cadence and much more to get a fit tailored to your needs.