In terms of what's better for the car...it makes no difference at all. Whether you downshift before stopping or go to neutral it makes no difference mechanically or reliability wise.
For me personally, sometimes I downshift and sometimes I put it in neutral. It depends. If I'm a distance away and the light turns red, I'll pop it in neutral and coast and and apply the brake as I get up to traffic. Other times I'll downshift and slow down that way as the traffic may start moving by the time I get up there. Other times I may downshift and brake as I get to the light/traffic. There is no 'right way' or 'better way'.