Having bought both at the same time ($50 for both, FTW!), I have begun to attempt to get further on IU (at Velspume Tower), and just reached the 2nd disc on TLR, here are my thoughts:
Of the 2 games, critical reviews put IU well ahead of TLR, as IU managed a low to mid 70's, while TLR had mid 60's. I can honestly say that reviewers do not know what they're talking about, by giving TLR those kinds of scores vs. IU.
Overall, I think TLR is a better game. Visually, TLR is a bit better, with more varied areas, and better level design. The battle system in TLR is top-notch, and one of the shining points of the game. Also, the character models as well as VA and lip-synching (on the US version) is a bit better.
Neither game is awesome, as they're both held back by technical flaws, and a mediocre storyline, as far as I am on both games. However, IU just 'feels' like a mediocre, Enchanted Arms-style ARPG that just never was executed well, whereas TLR feels like a diamond in the rough: awesome game, but has some glaring flaws that make you scratch your head. It's a lot like Eternal Sonata, I think, as a few flaws kept it from being in the upper echelon of JRPGs available.
My scores for the various X360 JRPGs:
Tales of Vesperia: 91
Blue Dragon: 88
Lost Odyssey: 88
Culdcept Saga: 83
The Last Remnant: 78
Eternal Sonata: 78
Infinite Undiscovery: 74
Enchanted Arms: 73
Phantasy Star Universe: 65
Kingdom Under Fire: CoD: 60
Hopefully that gives you a general gist of where I think the X360 library stands. IU is pretty much mediocre on all fronts with a decent combat & synthesis system, whereas TLR was better in every way, except for technical glitches that were woeful. If you get TLR, install it to your HDD, as it will greatly improve your game experience.
Back from the dead, I'm afraid.
