I had an experience with some network device (not Cisco) that even the fault is detected by physical link failure, having BFD configured (and it detect the fault by interface event, not keep-alive time out) make the recovery faster. I think it is be...
I've heard from a friend that this is the solution before virtual-link.In my opinion, using tunnel that add overhead and reduce the path MTU is not preferred. Dealing with MTU issue was a pain in the day that I was not quite understand it thoroughly...