MTH, no question. For starters, I've been VERY unimpressed with the quality of Lionel. I've bought 5 operating accessories and 8 operating cars. 4 of the accessories had to be taken apart and repaired right out of the box or within a week or two of being unboxed. 2 of the operating cars have also required repair or adjustment within weeks of being acquired. "Quality control" seems to be an alien concept at Lionel.
Beyond that, I have a Lionel FasTrack starter set and then upgraded to a MTH locomotive with the DCS Remote Commander remote. For me the advantages are:
1) Easier to use. My layout is also operated by my 6 year old daughter and she found the remote easier to use then the conventional controller, especially when it came to changing directions.
2) More/better sound effects.
3) Safer on grades. This was the main reason I bought the DCS. We have a two tier layout and I've always been worried that my kids or their friends would forget to ease up on the throttle when coming down the grade. With DCS you don't have to worry as it automatically maintains speed.
4) The controller and power supply are two different units. If your layout grows or you start adding a lot of accessories you can easily swap in a bigger power supply fairly cheaply. I have a 100 watt brick and it easily powers my 5x10 layout including 4 operating accessories and three lighted buildings.
Downside? A few:
1) The DCS Remote Commander isn't always very responsive. This can be a bit frustrating when you need to pull a car up to exactly the right spot for an operating accessory.
2) The DCS Remote Commander only works (AFAIK) with other MTH DCS locomotives. This means my Lionel locomotive goes unused.
3) It's pretty small and like the TV remote can easily go AWOL, especially if you have small kids!
I'm about to upgrade to the MTH DCS Commander which can easily be found for well under $200. It will operate DCS and conventional locomotives, isn't a handheld remote so it can't get lost, and the power wheel has a more tactile and enjoyable feel than the rocker button on the Remote Commander. Seems like a big improvement over the Remote Commander and a whole lot cheaper than the DCS Remote/TIU combo that costs nearly $300. Should be a good and not too terribly expensive upgrade.