(may Allah be pleased with him) said, "The Messenger of Allah (peace be upon him) taught me Tashahhud (testification recited in the sitting position in the second/last unit of Prayer) while holding my hands, just like he used to teach me Surahs of the Qur'an. 'All salutations, prayers, and goodness are due to Allah. Peace be upon you, O Prophet, etc', while among us. When he died, we began saying 'Peace be (Part No. 7; Page No. 10) upon the Prophet.'" Many people use and recommend this last form.
The way of pronouncing Tashahhud said by the Messenger of Allah (peace be upon him) in Salah (Prayer) and recommended to the Sahabah (Companions of the Prophet) is what was related by Al-Bukhari and Muslim in their two Sahih (authentic) Books of Hadith, from
`Abdullah ibn Mas`ud (may Allah be pleased with him) that he said,
The Messenger of Allah (peace be upon him) taught me the Tashahhud just like he used to teach me Surahs of the Qur’an, while holding my hands. (Its form is): 'All the compliments, prayers and good things are due to Allah. Peace be on you, O Prophet, and may Allah’s mercy and blessings be upon you. Peace be on us and on the true pious slaves of Allah. I testify that none has the right to be worshipped but Allah, and I also testify that Muhammad is His slave and His Messenger.'
This is more authentic, as the Prophet (peace be upon him) taught it to his Sahabah. He did not tell them that when he died, they should say "Peace be upon the Prophet".May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.