"The best finish is one that soaks in (a penetrating finish) rather than one that sits in top (a film-building finish). That's because a bench invariably gets beat up and scratched as you use it. A film finish will get chipped and will have to be removed entirely before you can apply a new coat. With a penetrating finish, you can simply spot sand and touch-up as needed. Choose either a straight oil or a finish that blends oil and urethane. Just make sure it says 'penetrating' on the label."
You'll find lots more useful info on woodworking and homeowner DIY in the current issue of Workbench. You can find it on the newsstand, or better yet, get a free preview issue.