Now that I've discussed conditions and overflow, I can explain what the dilemma is (or was, back when I was thinking about it). The way I see it, there are three methods of handling conditions and overflow (although two are much more similar than the third).
MIPS treats signed overflow (but not unsigned carry, which it provides no mechanism for detecting) as an exception. When an arithmetic instruction generates signed overflow, an overflow exception is generated, and the exception handler is called. Separate unsigned arithmetic instructions exist, which will not throw overflow exceptions.
Conditions, on the other hand, are implemented by a series of conditional branch instructions: beq (branch if two values are equal), bne (branch of two values are not equal), bltz (branch if value is less than zero), blez (branch if value is less than or equal to zero), bgtz (branch if greater than zero), bgez (branch if greater than or equal to zero).
While overflow exceptions can be convenient, this method has many shortcomings. First, comparisons of two values is cumbersome and slow, as they must be performed using a number of instructions. Testing for carry is similarly slow, and also requires multiple instructions. Finally, exceptions are slow. Even in a single-tasking system (like the Playstation, which uses a MIPS CPU), where the OS doesn't need to do complicated exception handling before control returns to the program (I benchmarked this taking more than 100,000 cycles on my NT computer), if the exception handler is called in kernel mode (as is the case for MIPS, x86, etc.), a full kernel mode transition is still required before the user mode handler (i.e. the catch block) can get invoked (I don't know about MIPS, but on x86 this kind of thing can take hundreds of cycles). Compare this to the worst case scenario in a Pentium 4 (the worst performing CPU I know of, with respect to unpredicted branches), where an incorrectly predicted branch can stall the CPU for 29 cycles.
x86 uses perhaps the most obvious method of handling conditions and overflows: a condition register. This register has flags for a wide variety of conditions, including carry, overflow, zero, signed, all four being set (or reset, as the case may be) by math and binary (and, or, etc.) instructions. In addition (and likely on account of the fact that the x86 only has 8 registers), x86 has two comparison instructions: CMP, which is equivalent to a subtraction, save that the result is not written to any register (thus conserving a register, while setting the flags from the operation), and TEST, which performs a binary and, then discards the result.
x86 offers three ways of responding to conditions. First, conditional branches allow for branching based on various conditions, such as greater than, less than, carry, signed, etc. As well, conditional set instructions set a register depending on whether the condition is true (1) or false (0); this is commonly used for complex boolean algebra expressions. Finally, conditional move instructions perform a move only if the condition is true. The conditional set and condition move instructions are of particular value, as they allow actions other than branches (which can be mispredicted) to be taken based on conditions.
PowerPC uses a similar but simpler method of handling conditions and overflow. It also uses a condition register, comparison instructions (similar to the x86 CMP command), and conditional branches, but does not support conditional moves or sets. What is noteworthy, however, is that each math and logical instruction comes in two flavors: those that set the condition register, and those that don't. This allows other math operations to come between the condition register being set and the action taken as a result.