Subjectively, pick whichever car you think looks the best.
Subjective or emotional reasons aside, the performance of the GTO clearly blows the Mustang away. The engine, transmission and chassis aren't even close. Think of the GTO as a Cobra -- while the Mustang is just a GT. And with this Cobra -- you can still bolt a puffer on it for astronomical output. You can do the same with the Mustang -- but, seriously, the 4.6 Romeo platform has always been weak.
The interiors aren't even close, either. The Mustang's is small and cheap. It's gauges are HORRIBLE. The seats are awful, awful, awful. No lateral support. And the Mustang's steering wheel doesn't telescope -- so if you've got long legs -- prepare to assume an arms-out gorilla-like driving position. Sure, the Mustang's got a bigger trunk and fold-down back seat -- but if you're looking to haul kids and lumber, try a pickup truck.
That said, the manual shifter in the Stang is light years ahead of the flubbery, rubbery unit in the GTO. Then again, a $225 shift kit fixes that.
There are other, subtle differences in the GTO that clearly state that this car is a totally different, much more refined car than the Mustang (I've posted this before). For example, the build quality of the GTO is fantastic. The fit and finish of mine is as good as BMW and better than Mercedes. Reflected surfaces down the entire side of the car, across the fender, door and quarter panel don't vary one iota -- even across seams. That is incredible. Then there's the design of the door. The GTO has glass in frame windows. These seal better and reduce wind noise. They last forever, too. The Ford? Just a big, dumb rubber seal that's going to whistle with wind noise in about 18 months. Truly an inferior design. I know, because I had a 1994 Mustang GT that was built the same way.
Reliability? Who knows. I bought a first year SN94 in 1994. What a piece of junk that was. New engine at 25K. Just driving along at 40 when a valve fell in. While the Mustang is a new from the ground up vehicle -- rest assured that all of the major components of the GTO have been built since 2000.
Bottom line? Ford has cut all kinds of corners to bring the Mustang in at a lower sticker price. The solid axle chassis. The crummy interior. The cheap door seals. The GTO? It costs more -- and the extra effort shows. Don't be a schmuk. Get the GTO, stick some wheels and tires on it, change the shifter, and order a blower from Magnacharger as soon as you possibly can. You won't be disappointed.