It's not so much that bio-balls do not work. It's that there are better alternatives available, If your setting up a new tank, then don't go with bio-balls, go with a better filtration system.
When selecting a bio-ball type media, if you have no other choice, different bio-ball designs do things a little differently. For example, some have greater surface area, allowing more bacteria, others are more open allowing greater gas exchange,
I agree with Royalscott, either design will work just fine.
I do disagree with ddioox64 bout " Bio balls need rinsed ever so often where rock and macro algaes don't." Properly used, and this means the water is prefiltered for particulate matter, bioballs, used as a bio-media never should be rinsed or cleaned. In fact, they are self cleaning, in that any bacteria films that get too think will fall off the media. The reason bio-balls become a dirt trap is that the water is not often prefiltered, so the bio-balls end up becoming a mechanical filter, and then a dirt trap.
Bio-balls used in a skimmer, such as a downdraft skimmer, should be cleaned, This usually means using a brush to chean each bio-ball. In this case you want to remove any bacteria coating, since it's not a biological filter in this case.
In addition live rock used in a refugium should be cleaned from time to time. You can use a powerhead to blow it out,