Best Practices: Changing Values

What is the best way to design your tables in cases where field values change?

Example:
CREATE TABLE Product (ProductID INT, Description VARCHAR(32), Price SMALLMONEY...);

CREATE TABLE Purchase (PurchaseID INT, ProductID INT, Quantity INT);

Since price obviously change over time, I was wondering what the is the best table schema to use to reflect these changes, while still remembering previous price values (like for generating reports on previous sales...)

is it better to include a "Price SMALLMONEY" field in the purchases table (which kind of de-normalizes it) or is it better to have a separate ProductPrice table that keeps track of changing prices like so:

CREATE TABLE ProductPrice (ProductID INT, Price SMALLMONEY, CreationDate DATETIME...);

and have the Purchase table reference the ProductPrice table instead of the products table?

I have used both methods in the past, but I was wanted to get other peoples' take on it.

Thanks