Both, actually. We can probably never know exactly how Latin was pronounced.
We can, however, know quite a few things with great certainty. A long vowel is really the same sound as a short vowel, but you hold the sound longer in your mouth. The result is that you have a subtle difference in vowel pronunciation duration (which is pretty hard to distinguish for most of us) and a slightly different sound as well. And if you care to know about consonants, those are somewhat different from how they describe them as well. I haven't even studied into this very far, but there are still a lot of things I know of in which the textbooks don't tell you the exact truth for the sake of simplicity.
flebile nescio quid queritur lyra, flebile lingua murmurat exanimis, respondent flebile ripae