Using Nurburgring specifically, they both have their pro's and cons.
GT5 has the Nurburgring tracks accurate to 12 inches of elevations, don't know exactly what Forza is, but GT5 has the track more accurately modeled.
GT5 will have better car physics on the very first lap, on the premium cars (not the standard one), but not in every regard. From my experience with the game GT5 will model weight transfer during cornering more accurately then Forza, but Forza will model body roll more accurately. This is because in Forza Motorsport 3, engine locations are only placed in general areas (front, mid, rear), where GT5 places them exactly where they belong.
However Forza Motorsport 3 has more accurate real time tire deformation, so after just 1 lap Forza Motorsport 3 will begin to model cars better. Tire deformation on just 1 lap on Nurburgring in real life makes a huge difference, that's why all lap times for production cars are set on new tires, on the first lap. Playing Forza you notice this.
So to sum it up, GT5 Premium cars model weight transfer and cornering in general more accurately for about the first ten minutes of a race. Most races fall within this duration. However anything long, and Forza Motorsport 3 does it better.
However none of this matters, Forza Motorsport 4 will be much better then both games in every aspect.
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