I could go either way with this one. SMG has better gameplay, visuals, and very innovative level design, but I feel very detached from the game. I feel like I'm just jumping from level to level, running around each level to find a star somewhere.
The story and settings from SMS were much better, imo, as they really helped draw you into what Mario was doing and why he was doing it.
Edit: Well, really, I'm not sure what it is I like about SMS, but I love the game. I origianlly was thinking it was the setting/story, but SM64 didn't have much of a story either, and I loved it just like I loved SMS.
I guess I just haven't played SMS recently enough to really comment on it's positives and negatives.