PCInk - 4:23 pm on May 13, 2010 (gmt 0)
I would say it would depend on the item.
If you are selling jeans, I would opt for the redirect to an alternative product or category. If I was looking for clothes and a similar style was available, I would possibly like to see the alternative.
On the other hand, if you are selling something more specific such as laptop batteries, then I would keep the page listed but mark the item as discontinued and don't allow me to buy them item. There is no point showing me the battery from the Widget 6000 if I want the battery for the Widget 2500.