Its both: From an aesthetics point of view, if someone reviewing your transcript sees a "W", then s/he will wonder why. The right thing for them to do is ask you WHY you withdrew. If they dont bring it up, then you should tell them your reasoning (and I suggest not saying, "I couldnt handle the course work.") Think up a GOOD excuse.
From a GPA point of view, it does NOT hurt your transcript. It does not average in what so ever. So base it on that, and good luck!

 

I've heard that if you have a W on your transcript there is some way you can ammend a comment into your transcript explaining the W...but this is just what I've heard.

 

Not for nothing but some schools put a W on you transcript if you drop the class at any point. Meaning.... that if you withdrawl on day 1 you get a W and you could just be doing it to get another class in that classes place. Most schools dont put a W on your record until about 2 or 3 weeks into the class. You could attempt to say that this is what happened but that would (well maybe would) be lying.
I dont think that it matters that much if its just one W, but if you have multiple or multiple in a semester you might end up looking like a slacker.
I have taken 6 courses (19 credits) in a semester and 12 credits the next, I was asked why it was like that and I said that the courses that I wanted were not open in the fall.
Usually if it is a problem they will ask you "why the W" and you can then make your case.

 

many students at my school would drop a class if they couldn't get a A or B. A few won't hurt, but too many and a med school will know what you withdrew for...to pad your GPA. Many look down on it. I knew a guy with a few Ws and Ps (pass/fail) and he got into Yale med school so you never know...of course he majored in economics (something med shoools LOVE to see...they like business/econ majors better than science ones actually).