Morning exercise is great because it gets your metabolism going for the day and tends to make you more alert all day. Gyms and other exercise places (tracks, parks, courts, etc.) tend to be less crowded in the a.m., and air quality tends to be better. People who exercise in the morning also tend to exercise more consistently, possibly because it is easier to get distracted as your day progresses.
However, your body is most prepared for exercise later in the afternoon (around 6pm), when hormone levels, body temperature, and overall energy are highest. Afternoon workouts tend to be “better” workouts in terms of performance, meaning that you will lift more, run farther, and generally feel more powerful than at other times of day. That assumes, of course, that you don’t get distracted from exercising altogether.
In the end, it really comes down to when in the day exercise best fits your schedule. If you can make it in the morning, do it. Just maybe spend a little more time warming up because your body is a little cold and sluggish when you first get moving. If you can make it in the afternoon, do that. Just make sure that your day doesn’t get away from you so often that you end up never getting to it at all.
Remember also that as I discuss in Your Fat, “exercising” doesn’t always mean going somewhere to put on different clothes and push yourself to your limits. Just get yourself moving. Try using the stairs instead of the elevator, the bike instead of the car, or the Frisbee instead of the DVD player. All of it helps, no matter what time of day you are doing it.