After playing GT5 for a few hours and Forza 3 for a few days, imo:
-Forza has better photomode because you can pause out
-Forza has nicer looking environments
-Forza has real-time animated braking lines which I love
-Forza has a better feeling of damage (GT you just bounce off every damn thing)
-Forza has better AI
-Forza has better sound design
-Forza has painting cars & trading designs
-Forza has more consistent looking cars when racing against them
-GT has more detailed cars for premium
-GT has better lighting and overall better looking engine while racing
-GT has better handling
-GT has more content
-both have terrible loading installed, it felt like Forza loading for each race was longer, but GT has loading for every little action anywhere which Forza doesn't so much
imo it's about even. GT wins in some of the most important aspects like handling/graphics engine/content, but it's also waaaay rougher than Forza and missing a bunch of modern day expected features in a racing game.
I don't really like either game because I'm an arcade racer fan. I just like taking pictures in photo mode with sims.