ALL grips work well! Standard basic grip would be palms facing away from you, with a wide grip of course. Reverse-grip. My favorite is parallel grip chins(close-grip) though. There are no "best" though in my opinion. chins in general(despite grip) are definitely the best lat exercise as far as I am concerned, despite the grip you assume. I would go so far as to say, that if you were only able to do like 3 reps on any given grip with chins, that that would be more condusive to lat mass than would any amount of weight/reps on a machine.
The reason that chins are better than machines, even though they are the exact same range of motion is simple. There is no mechanical advantage assumed by the lifter with chins. It is just you vs. your weight. No pulleys & cables helping you along.