The S3 has different cams and a bigger intercooler. I think apart from that its identical engine wise.
But you also get bigger brakes as well.
If your modifying the car then i think S3 is the way forward. 1-Its got traction so your not having to waste money on semi slick tyres and an LSD. 2- You wont need to buy an Intercooler and bigger brake setup so thats nearly a £1000 difference there straight away.
The best person to speak to is GazbutS3 tbh, hes had the GTI, Ed30 and S3 iirc