Stock for stock, the Gen-4 is a better car. HOWEVER, the Gen-4 is not as modification friendly as the Gen-3... and there is technically nothing on a Gen-3 that cannot be changed to Gen-4 spec if you so desire.
Now, if you plan to keep the car bone stock, get a Gen-4 and dont look back. However, if you are a "modder"... you should still be looking at Gen-3's.
When you factor in the price difference, a whole new world opens. For example, for the price of a Gen-4, you can buy a nice Gen-3, put in the TR6060 transmission and differential from the Gen-4, AND purchase the VS-X700 Gen-4 conversion package w/Gen-4 hood. Basically, for the same cost, you have a car that is identical from the outside, looks like a Gen-4 [but even better] under the hood, makes 100 horsepower more than the Gen-4, and has an identical drivetrain to the Gen-4 otherwise..... and can still be modified further if you choose. Basically, take all of the good, and leave all of the bad.
There are also another nice advantage to the Gen-3: They have superior cooling systems compared to all other generations, which can be edited by the SCT software to do some very unique things.
For reference, this car is a Gen-3!