Forms are Controls (just look at the inheritance chain), and a Form itself doesn't have a whole lot of overhead in and of itself. It creates a native Window, but that's about it.
What should drive your decision is how you use and display your UI elements in your solution. Forms are conducive to many UI architectures, and they're what most developers are familiar with. The designer supports them well, and creating, showing, hiding and closing Forms is a well documented, often used paradigm that works just fine. Yes, you have the load penalty whenever a Form is created as it creates all of its contained controls, but you're going to pay that even if it's a UserControl. The child controls have to be created in either case.
One might argue that Forms require that you recreate them every time, but that's not true. If you use ShowDialog or Hide instead of Close, you can reuse your Forms and pay the price once. The advantage here is that the Form holds your Controls in teh collection and manages all of that for you, so you have little to worry about with the GC and remembering what roots you have alive.
The UserControl paradigm is more complex - you have to manage loading and unloading controls yourself to keep memory pressure low. Complexity also increases cost - cost to maintain, cost to support, and likely cost to develop. However there are some clear advantages to UserControls in some scenarios too. If you use an MVC/MVP pattern and some form of framework that handlesyour Views, a USerControl makes a really good View with the Form becoming the Workspace (the SCSF for the desktop is a classic example of this, and so is the OpenNETCF.IoC framework for the CF).
So which is "better"? It depends on how and where you're using the elements, how your team is already doing development, and how you've architected the solution you're plugging in to. In short, the is no one right answer.