It depends on how you want the stitches to go on your button band. If you knit it with the sweater, the stitches will go in the same direction as your other stitches. If you knit it on, the stitches will go in the opposite way. This looks nice, too. The biggest problem with knitting on a button band is getting the proportions right to make sure it doesn't get to tight or to sag. I've done it when you pick up 3 out of 4 stitches, and that worked out, but I'm not sure if that's the right proportion for every type of yarn and needle size. I'm sure that can be found somewhere.
Another thing you can do with a button band that's added on is to knit it out to as far as you want it to be, then purl a row, and knit again the same distance--this way you can fold it over for more 'oomph' to hold up your buttons.