This was the exact decision I had to make. I went for the MK5 GTI, as the handling is superb, steering 'feel' is amazing, as well as better mpg, easier to tune, and it looks great too on Monza 2's. It is a great drivers car, and it puts a huge smile on my face every time I drive it. These are also fairly cheap to run on servicing and parts.
BUT....having come from a V6 4Motion, I really miss the instant traction of 4wd, and the noise of a V6. The handling of the Mk4 R32 is still very good, and always feels very planted. The mk4 R32 was the launch of the R brand, and VW over-engineered the car to ensure it was a good one. I think I remember reading they were hand built at a loss of 8 grand per unit, so I don't think you need to worry about them being a bit long in the tooth. They also look superb, especially in 3 dr black or Jazz blue. The interior is lovely, with brushed aluminium inserts, classy dials, and the only thing that really ages it is the audio/sat nav, which can all be upgraded.
It really comes down to you deciding what you want from your car, and which you enjoy driving the most. Get test-driving!
