I do both. I'm employed and I do freelancing in my free time. Both have their advantages, I suppose. Freelancing is much more financially rewarding - believe it or not, I can get my monthly salary with just 5 "private classes" (as we normally call them here, in Russia)! Well, that's mostly because salaries in Russia are quite low in general...
Doing freelancing also enables me to meet all sorts of people and practice my teaching skills with pre-school kids, adult professionals, Harry Potter teen fans, well, anyone...
Having done this for several years, I think I'm now ready for almost every student that chances to come my way...
Teaching university students has its good points as well. They are usually linguistically minded and interested in exploring every interesting point in depth. Moreover, they have enough special knowledge to be able to do this. Most of my non-university students need English for practical purposes and are not concerned with subtleties.