Join Date: Nov 2008
Location: San Carlos, CA
Bikes: '83 Miyata Two-Ten, '84 Raleigh Pestige, '09 Downtube 8H
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If you attach it securely, it won't become dislodged.
Even if it's in front of the seat stay and becomes dislodged, it'll still get tangled up in the wheel because the wire will still be attached. I'd say the primary decision factor is which way will allow you to get it better aligned with the tire. That seems to be the biggest issue with bottle generators. If they aren't well positioned, you lose a lot of efficiency (not to mention possible extra wear on the tire).